Disrupting Organizations with Decentralized Governance through DAOs
Jag Sidhu, President of the Syscoin Foundation, announced a plan to develop a new standard for Decentralized Autonomous Organizations while speaking in Dubai at the Binance Blockchain Week 2022 conference (DAOs). The Syscoin Foundation has begun work on a project that they believe will be a big evolutionary step for DAO technology, bringing fresh vitality to the market. In addition, the company wants to start implementing its groundbreaking new model in 2022.
To date, DAOs have been plagued by significant problems and have failed to match the spirit of bitcoin. Self-sovereign capital is the core value proposition of cryptocurrencies. ‘Nor my keys, not my cash,’ says the narrator. DAOs now possess users’ funds and manage them in a treasury managed by a few persons. It’s akin to not being able to control your wallet’s keys. Furthermore, present governance systems are incompatible with stakeholder values. Typically, governance does not control the protocol directly; rather, it serves as an advisory vote to signers on the multi-sig that controls the treasury. The common gap between a DAO governance token and the protocol’s real value proposition exacerbates the problem.
With an innovative methodology for organizing bitcoin as capital investments, DAOSYS attempts to overcome these concerns. DAOs, according to the Syscoin Foundation, should function more like pure AMMs, with an autonomous and permissionless protocol that anybody may use to consume the DAO’s services, essentially functioning as autonomous economic agents. This indicates that DAOs must go beyond the present phase of capital extraction maximization. The economics must be customized to support the DAO’s mission statement and executed without the need for external controls.
With the current state of smart-contract and DeFi architecture, it was almost impossible to construct a functioning DAO prior to this endeavor. It is feasible to deploy DAOs simply as a liquidity pool by iterating on the AMM model to generalize the process. Without the use of a governance token, a treasury management platform may be built using antifragile tokenomics and interactions with DeFi protocols. Existing markets may be used to organize money to carry out mission statements by future DAOs. DAOSYS includes this technology, known as the Autonomous Service Engine.
Understanding DAOSYS and Autonomous Service Engine
DAOSYS will be a reference design that will use the Autonomous Service Engine to turn Syscoin into an innovation hotspot by allowing users to control their assets. A risk-mitigating financing mechanism is created due to the antifragile market architecture. This moves the major risk in supporting new projects and activities from the Syscoin Foundation’s treasury to basic opportunity cost, resulting in some great efficiencies for the Syscoin Foundation and all who participate. Because it is intended to promote the progress of Syscoin’s ecosystem, a full-stack Layer 1 blockchain with a modular architecture that enables a scalable Layer 2, DAOSYS will be well-positioned to encourage digital value from the ground up.
The non-profit Syscoin Foundation’s purpose with this program and its DAOSYS implementation is to offer the breakthroughs needed for DAO technology to disrupt for-profit business and NGO funding by becoming a go-to innovation engine.
Syscoin is a decentralized and open-source project launched in 2014 and uses the NEVM blockchain to merge the best of Bitcoin and Ethereum into a single modular platform.
Through ZK-Rollups and other Layer 2 technologies, Syscoin is ushering in the next phase in the development of blockchain technology, bringing Bitcoin’s proven security and Ethereum’s Turing-complete programmability to genuine scalability.
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Image credits: Brian McGowan and David Rodrigo.
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