Can it replace the bank? Coingabbar

As we know Dao, or decentralized autonomous organization, is another promising result of blockchain technology, which leads to revolution in the banking sector.

Banks have started using blockchain technology for their operations today, but many companies such as JP Morgan have also started with blockchain-based transactions and other services.

What is Dao?

Dao or decentralized autonomous organization is a decision -making unit that is not centralized, which means that it cannot take a person decision. The DAO is powered by a certain set of rules made by blockchain.

Like a centralized organization Dao does not take time and has many other functions that help shape the network and the ecosystem created by it.

Dao’s primary features

Dao is not dependent

Instead of relying on directors and officials of an institution like centralized organizations, members of the community rely on the code that applies regulations in the DAO-based organization.

Clear outline

Transparency is a major feature of Dao, they are clear, transparent, verified and public.

Principal-agent’s solution to the problem

Principal agent problem or PA has always been a problem that almost every institution faces. The PA problem arises when the interests of an agent do not match with the stakeholder. In such a situation, imagine an agent who is serving as a business CEO and also manages like stakeholders.

Many uses

DAO is not an application of blockchain technology, it is a set of a protocol that makes it easier for the user to rely on blockchain. Many DAO-based trampies including Different Various Blockchain-She serves in based industries.

Hard voting mechanism

DAO’s voting system determines its quality. Typically, any one can propose a proposal on the network that will be followed by the members or the proposal will be canceled. If someone wants to become a Dao member, he will have to pay some money in the pool.

Dao types

Protocol dao

One of the most popular types of Dao-based network is DAO. As their name suggests, they are applied and related to a set of network protocols to keep them useful and decentralized. In addition, protocol or general Dao borrowing, lending to other protocols and exchanges Defi To offer services Smart contracts Uses up.

Protocol dao usually amm and Defi Such as Maker Dao, Uniswap Finance and Third Finance are used.

Collector dao

Collector Dao is another important type of Dao, as is clear from the name, to collect a main function of such Dao. NFT And Web3 With the increasing popularity of, they help in buying NFT.

Remember Crypto Punk #2890 which was sold for a price of $ 761K. It was bought by 30 people who made DAO. Protocols like Flamingo regulate such Dao.

Philathropy Dao

Philanthropy Dao is not very popular, yet an essential part of the community. As their name suggests, it focuses on the purpose of changing through the web3 ecosystem.

Weighty Inexperienced Dao is the world’s first Philomotopy Dao, it is associated with Big Green initiative that is working to improve nutritional price and understand climate effects on food.

Investment Dao

Dao offers a series of uses that can help the community. This includes investment opportunities that are shared by the entire community. DAO acts as a traditional fund where DAO members decide to invest all agents of the community, the only difference that traditional investment funds are centralized.

Grants dao

Grant Dao, like Investment Dao, is a good way to earn money. Community members can vote on decisions related to distribution of money and also connect their capital with grant pool. Many new and upcoming schemes (mainly Defi) are funded by such DAO. Grant Dao is usually a small part of a large organization, and uses additional money to lend.

For example, Aave Protocol has its own grant dao, named Aave Grants Dao. It is a community-powered program Pooling Fund that has the ability to run new concepts in Aave Protocol Ecosystem.

How can DAO replace the bank?

DAOs can help solve some major problems faced by traditional banks. DAO Blockchain-based architecture can make revolutionary changes in the banking sector by streamlining internal workflows. A centralized financial institution takes a lot of time to implement any new system or technology, no matter how short it is, Dao does not waste time or does not take too much time to streamline the internal process.

A small group of people control banks, and the cases of banks are hidden from the general public, which increases the chances of corruption, fraud. Dao -based financial institutions promote decentralization, transparency and safety.

Like financial institutions, Dao is far from reality, banks are considered a pillar of the country, and may seem some decades to change them but, in future banks and financial institutions are likely to have DAO.