Why we put the DAO in Gain DAO

If you have already read some articles about us, you have probably wondered what the DAO in Gain DAO stands for. Or maybe you already know that DAO stands for Decentralized Autonomous Organization. But what does this mean? How does this structure work and why did Gain decide to be a DAO? In this article, we will explore the mechanisms of the DAO in depth.

What does it mean to be a DAO?

Simply put, a DAO is an organization controlled by computer code. As such, it has the ability to function autonomously, without the intervention of a central authority. By using smart contracts, a DAO can work with external information and execute assignments based on it. All this is possible without human intervention. A DAO is often run by a community of stakeholders that are connected by a token mechanism. In our case, we use the GAIN tokens.

The rules and transaction records of a DAO are transparently stored on the blockchain. Rules are generally determined by the votes of stakeholders. The way decisions are made within a DAO is mostly through proposals. If a proposal is approved by a majority of stakeholders, it is implemented. In some ways, a DAO works similarly to a corporation or a nation-state, but the key difference is that a DAO operates in a more decentralized way. While traditional organizations operate with a hierarchical structure and layers of bureaucracy, DAOs have no hierarchy.

As you can guess from the name, a DAO is both decentralized and autonomous. It is decentralized because no single entity has the power to make and enforce decisions. And it is autonomous because it can function on its own. Members of a DAO are not bound by a formal contract. Rather, they are linked by a common purpose and network incentives linked to the consensus rules. These rules are completely transparent and written in the open source software that runs the organization. Since DAOs operate without borders, they may be subject to different legal jurisdictions.

Once implemented, a DAO cannot be governed by a single party, but is administered by a community of participants. If the governance rules defined in the protocol are well designed, they should steer actors towards the most favorable outcome for the network.

In short, DAOs provide an operating system for collaboration without borders or hierarchy. This operating system allows individuals and institutions to collaborate without knowing or trusting each other.

Why did Gain choose to be a DAO?

DAOs have many advantages. The overarching benefit of a DAO is that it focuses on solving problems that plague modern businesses and organizations. Many of these problems relate to the management of organizations, and a DAO can solve this by implementing an autonomous structure. The problem with traditional organizations is that they have a top-down structure, so contributions from everyone who is not at the top of the pyramid often go unheard.

At Gain, we do things differently. Every investor in our DAO has a unique opportunity to help shape the way Gain is run. Stakeholders can submit proposals and ideas for improvement. The consideration of those ideas is not entrusted to a boardroom staffed by management that has no contact with its shareholders.

Another advantage is that there can be no arguments or power plays in a DAO thanks to its autonomous structure. A DAO has a set of rules and policies that are pre-agreed. Stakeholders have access to these guiding principles before making their investment. Once the rules are established, the DAO executes them without the need for management. Everything happens as it should happen, when it should happen, thanks to the code and the smart contracts.

Finally, transparency is a major advantage of our DAO. Everything that happens within Gain DAO becomes a permanent part of the blockchain. It is recorded in the distributed ledger and kept forever. Those who hold a stake in the DAO have input into how funds are spent and managed. Everyone bears the same responsibility.

So what sort of things will we vote on in our DAO? For example, the DAO might choose on which currency a new Pool will be based. Also, new Technology Providers will be chosen through a DAO vote. These Technology Providers are responsible for the automatized trading algorithms, so it is important that they are trusted by the DAO. The DAO can also vote on new brokers. These are all central elements to Gain DAO, so it is clear that the DAO is responsible for making key decisions!

Ethereum as the basis for a DAO

Ethereum is the perfect foundation for our DAO for a number of reasons. Ethereum is sufficiently distributed and accepted that organizations can trust the network. Smart contract code, once live, cannot be changed. This allows the DAO to operate according to the rules with which it is programmed, thanks to Ethereum. The Ethereum community has also proven to be more collaborative than competitive. This allows best practices and support systems to emerge quickly.

In short, the DAO is the perfect and stable foundation for Gain. Looking for more information about the Gain DAO and how you can be a part of it? Then visit our website.

TOP