With the rise of the popularity of cryptocurrencies
Cryptocurrencies
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities.
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities.
Read this Term and their allied technologies, the role of organizations has changed somewhat. Parallels now exist between the financial space and the cryptocurrency space. These parallels drive the securities vs. commodities arguments for cryptocurrency projects.
Decentralized Finance (DeFi) offers anyone with some innovation to create models which are in every sense financial but decentralized. This appeal led to renewed interest by governments in the DeFi space.
Similarities exist between the stock market and Decentralized Autonomous Organizations (DAOs). These similarities have enabled governance DAOs to resemble regular listed companies. From a regulatory perspective, it is a big plus.
Regulators won't have to look too far to regulate DAOs once they understand how they work.
DAOs Are Community-Oriented Organizations
DAOs function based on communal membership. Memberships of the community get determined by the tokens bought and who owns what, why, and when. The Smart Contract conditions which are encoded dictate the rules of operation of these communities.
We can think of any DAO smart contract
Smart Contract
A smart contract is a piece of software that automatically executes a pre-determined set of actions when a certain set of criteria or met. One of the key tenets of smart contracts is their ability to perform credible transactions without third parties and are self-executing, with their conditions written into the lines of code that form themAdditionally, these transactions are both trackable and irreversible. For example, a smart contract could be used to give royalty payouts to a musical artist each time a song is played on the radio. The contract detects when the song is played, and then automatically sends a payout to the artist or artist. All parties involved in a smart contract must agree to the terms of the contract before it can be executed. They must also consent to any changes made to the contract. Transactions made through a smart contract are traceable and irreversible.Smart contracts were first proposed in 1994 by American computer Scientist Nick Szabo. Szabo created a digital currency called “Bit Gold” in 1998, over 10 years before the creation of Bitcoin.Benefits of Smart ContractsMany proponents of smart contracts point to many kinds of contractual clauses that could be made partially or fully self-executing, self-enforcing, or simply both. Conversely, smart contracts can lead to a situation where bugs or including security holes are visible to all yet may not be quickly fixed.The fundamental goal of smart contracts is to provide additional layers of security that are superior to traditional contract law. In doing so, this reduces other transaction costs associated with contracting. Smart contracts appear most prevalently in the cryptocurrency space, having implemented countless instances of smart contracts.
A smart contract is a piece of software that automatically executes a pre-determined set of actions when a certain set of criteria or met. One of the key tenets of smart contracts is their ability to perform credible transactions without third parties and are self-executing, with their conditions written into the lines of code that form themAdditionally, these transactions are both trackable and irreversible. For example, a smart contract could be used to give royalty payouts to a musical artist each time a song is played on the radio. The contract detects when the song is played, and then automatically sends a payout to the artist or artist. All parties involved in a smart contract must agree to the terms of the contract before it can be executed. They must also consent to any changes made to the contract. Transactions made through a smart contract are traceable and irreversible.Smart contracts were first proposed in 1994 by American computer Scientist Nick Szabo. Szabo created a digital currency called “Bit Gold” in 1998, over 10 years before the creation of Bitcoin.Benefits of Smart ContractsMany proponents of smart contracts point to many kinds of contractual clauses that could be made partially or fully self-executing, self-enforcing, or simply both. Conversely, smart contracts can lead to a situation where bugs or including security holes are visible to all yet may not be quickly fixed.The fundamental goal of smart contracts is to provide additional layers of security that are superior to traditional contract law. In doing so, this reduces other transaction costs associated with contracting. Smart contracts appear most prevalently in the cryptocurrency space, having implemented countless instances of smart contracts.
Read this Term as the set of bye-laws or policy documents for company operations. These Smart Contracts determine how the DAO will run and what scenarios will occur.
This community-oriented ownership structure allows for autonomy, which regular companies don't have. DAOs can run themselves without recourse to centralized control. That's the difference between a listed company and a DAO.
DAO Tokens Are Like Shares
Tokens bought by people have functions that are like shares. The functions of any token depend on the type of token and its use-case scenario.
We have two classes of tokens: governance tokens and regular tokens. Governance tokens work in the same ways preferred stocks work. The DAO itself may offer a single cryptocurrency token for both use-cases (voting and governance).
However, governance tokens give the owners greater rights and control over activities within the organization. Regular DAO tokens and common stock are also similar.
Decentralized Exchanges Work Like Stock Exchanges
Because of the distributed and decentralized nature of DeFi projects, Decentralized Exchanges (Dexes) provide platforms for exchanging DeFi tokens.
Dexes and the DeFi space have come a long way. Before now, there was minimal regulation of the DeFi space. These days, it is not uncommon to find a fully regulated Dex with the same offerings as a stock exchange. The only difference is the assets traded on each platform.
Dexes also help fulfill the functions of cross-chain transactions. One example of this is Pangolin. The Pangolin Dex enables the exchange of assets between Ethereum and Avalanche. Pangolin is a marketplace where developers can move between both blockchains with ease.
Public Offerings And Dex Offerings Work The Same Way
Stock markets conduct liquidity events known as Initial Public Offerings (IPO) to introduce new stocks. It allows for the public purchase of equity.
Initial Dex Offerings (IDO) work the same way IPOs do. DeFi projects often deploy similar marketing practices and processes before an IDO. Some stocks usually have a private placement process for those who want to buy company stocks before listing. Pre-IDO events are also for those who intend to buy DAO tokens before listing them on the Dex.
That way, the price discount on tokens will be a strategic advantage to the investor.
About Voting Patterns Between Companies and DAOs
Voting patterns in DAOs function similarly to voting patterns in companies. Shareholders vote to influence the policies and other structural changes of companies. Token holders also vote on changes within DAOs.
It brings home the question of regulation. If DAO tokens get recognized as securities, then the corporate governance of DAOs will closely resemble those of companies. The only difference is that the community members have a say in the DAO's affairs than shareholders do in companies.
Pangolin, for example, offers its native token totally towards the community without reservations. Beyond the technical upgrades that occur from time to time, all actions are community-steered. I have also created a paradigm where the community is everything within the Pangolin ecosystem.
Companies pander to the interests and whims of a few people.
Will DAOs Takeover From Regular Companies?
As global political undercurrents and shifts in attitude occur, we shall see a significant interest in DAOs. As countries and other state actors create laws and rules for regulating the DeFi space, the various implementations of DAOs with different utilities will start occurring.
However, as in all things finance, DAOs will most likely be special-purpose organizations. But, the principles that govern cryptocurrency communities will get adopted by the corporate space.
Principles such as community, transparency, and co will put corporate governance on another level. It will also help spur other DeFi implementations with regular companies taking charge.
A fusion will ignite, and we shall see the DeFi space rule. But with different perspectives and utility.
With the rise of the popularity of cryptocurrencies
Cryptocurrencies
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities.
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities.
Read this Term and their allied technologies, the role of organizations has changed somewhat. Parallels now exist between the financial space and the cryptocurrency space. These parallels drive the securities vs. commodities arguments for cryptocurrency projects.
Decentralized Finance (DeFi) offers anyone with some innovation to create models which are in every sense financial but decentralized. This appeal led to renewed interest by governments in the DeFi space.
Similarities exist between the stock market and Decentralized Autonomous Organizations (DAOs). These similarities have enabled governance DAOs to resemble regular listed companies. From a regulatory perspective, it is a big plus.
Regulators won't have to look too far to regulate DAOs once they understand how they work.
DAOs Are Community-Oriented Organizations
DAOs function based on communal membership. Memberships of the community get determined by the tokens bought and who owns what, why, and when. The Smart Contract conditions which are encoded dictate the rules of operation of these communities.
We can think of any DAO smart contract
Smart Contract
A smart contract is a piece of software that automatically executes a pre-determined set of actions when a certain set of criteria or met. One of the key tenets of smart contracts is their ability to perform credible transactions without third parties and are self-executing, with their conditions written into the lines of code that form themAdditionally, these transactions are both trackable and irreversible. For example, a smart contract could be used to give royalty payouts to a musical artist each time a song is played on the radio. The contract detects when the song is played, and then automatically sends a payout to the artist or artist. All parties involved in a smart contract must agree to the terms of the contract before it can be executed. They must also consent to any changes made to the contract. Transactions made through a smart contract are traceable and irreversible.Smart contracts were first proposed in 1994 by American computer Scientist Nick Szabo. Szabo created a digital currency called “Bit Gold” in 1998, over 10 years before the creation of Bitcoin.Benefits of Smart ContractsMany proponents of smart contracts point to many kinds of contractual clauses that could be made partially or fully self-executing, self-enforcing, or simply both. Conversely, smart contracts can lead to a situation where bugs or including security holes are visible to all yet may not be quickly fixed.The fundamental goal of smart contracts is to provide additional layers of security that are superior to traditional contract law. In doing so, this reduces other transaction costs associated with contracting. Smart contracts appear most prevalently in the cryptocurrency space, having implemented countless instances of smart contracts.
A smart contract is a piece of software that automatically executes a pre-determined set of actions when a certain set of criteria or met. One of the key tenets of smart contracts is their ability to perform credible transactions without third parties and are self-executing, with their conditions written into the lines of code that form themAdditionally, these transactions are both trackable and irreversible. For example, a smart contract could be used to give royalty payouts to a musical artist each time a song is played on the radio. The contract detects when the song is played, and then automatically sends a payout to the artist or artist. All parties involved in a smart contract must agree to the terms of the contract before it can be executed. They must also consent to any changes made to the contract. Transactions made through a smart contract are traceable and irreversible.Smart contracts were first proposed in 1994 by American computer Scientist Nick Szabo. Szabo created a digital currency called “Bit Gold” in 1998, over 10 years before the creation of Bitcoin.Benefits of Smart ContractsMany proponents of smart contracts point to many kinds of contractual clauses that could be made partially or fully self-executing, self-enforcing, or simply both. Conversely, smart contracts can lead to a situation where bugs or including security holes are visible to all yet may not be quickly fixed.The fundamental goal of smart contracts is to provide additional layers of security that are superior to traditional contract law. In doing so, this reduces other transaction costs associated with contracting. Smart contracts appear most prevalently in the cryptocurrency space, having implemented countless instances of smart contracts.
Read this Term as the set of bye-laws or policy documents for company operations. These Smart Contracts determine how the DAO will run and what scenarios will occur.
This community-oriented ownership structure allows for autonomy, which regular companies don't have. DAOs can run themselves without recourse to centralized control. That's the difference between a listed company and a DAO.
DAO Tokens Are Like Shares
Tokens bought by people have functions that are like shares. The functions of any token depend on the type of token and its use-case scenario.
We have two classes of tokens: governance tokens and regular tokens. Governance tokens work in the same ways preferred stocks work. The DAO itself may offer a single cryptocurrency token for both use-cases (voting and governance).
However, governance tokens give the owners greater rights and control over activities within the organization. Regular DAO tokens and common stock are also similar.
Decentralized Exchanges Work Like Stock Exchanges
Because of the distributed and decentralized nature of DeFi projects, Decentralized Exchanges (Dexes) provide platforms for exchanging DeFi tokens.
Dexes and the DeFi space have come a long way. Before now, there was minimal regulation of the DeFi space. These days, it is not uncommon to find a fully regulated Dex with the same offerings as a stock exchange. The only difference is the assets traded on each platform.
Dexes also help fulfill the functions of cross-chain transactions. One example of this is Pangolin. The Pangolin Dex enables the exchange of assets between Ethereum and Avalanche. Pangolin is a marketplace where developers can move between both blockchains with ease.
Public Offerings And Dex Offerings Work The Same Way
Stock markets conduct liquidity events known as Initial Public Offerings (IPO) to introduce new stocks. It allows for the public purchase of equity.
Initial Dex Offerings (IDO) work the same way IPOs do. DeFi projects often deploy similar marketing practices and processes before an IDO. Some stocks usually have a private placement process for those who want to buy company stocks before listing. Pre-IDO events are also for those who intend to buy DAO tokens before listing them on the Dex.
That way, the price discount on tokens will be a strategic advantage to the investor.
About Voting Patterns Between Companies and DAOs
Voting patterns in DAOs function similarly to voting patterns in companies. Shareholders vote to influence the policies and other structural changes of companies. Token holders also vote on changes within DAOs.
It brings home the question of regulation. If DAO tokens get recognized as securities, then the corporate governance of DAOs will closely resemble those of companies. The only difference is that the community members have a say in the DAO's affairs than shareholders do in companies.
Pangolin, for example, offers its native token totally towards the community without reservations. Beyond the technical upgrades that occur from time to time, all actions are community-steered. I have also created a paradigm where the community is everything within the Pangolin ecosystem.
Companies pander to the interests and whims of a few people.
Will DAOs Takeover From Regular Companies?
As global political undercurrents and shifts in attitude occur, we shall see a significant interest in DAOs. As countries and other state actors create laws and rules for regulating the DeFi space, the various implementations of DAOs with different utilities will start occurring.
However, as in all things finance, DAOs will most likely be special-purpose organizations. But, the principles that govern cryptocurrency communities will get adopted by the corporate space.
Principles such as community, transparency, and co will put corporate governance on another level. It will also help spur other DeFi implementations with regular companies taking charge.
A fusion will ignite, and we shall see the DeFi space rule. But with different perspectives and utility.
