In the early 1990s, self-organization was proposed by sociologist Walter Powell. It was considered as a third model of governance that is independent of hierarchy and market. This is where the concept of DAO (Decentralized Autonomous Organization) originated from. Self-organization system can eliminate the inequality in the organization, let the organization members fully express their opinions and do sufficient communication and coordination. However, limited by the technical reasons, self-organization form is difficult to implement.
Until the birth of blockchain, DAO gradually became a recognized governance model. Smart contracts on the blockchain enable DAO rules to be implemented with techniques. On-chain tokens can be used to build a reward system for the interest distribution of DAO. And the blockchain itself can link individuals or organizations around the world without geographical restrictions.
In May 2016, the German company Slock.it launched the blockchain project “The DAO” and raised over $150 million worth of ETH through crowdfunding. Later, it was attacked due to code vulnerabilities, which caused a huge controversy about the security of DAO. In the past two years, along with the rapid development of DeFi, DAO once again usher in a new development opportunity. Especially with the rise of the metaverse, DAO once again gained the favor of many capitals. If 2020 is the year of DeFi, 2021 is the year of NFT, then 2022 will be the year of DAO.
What is DAO? DAO (Decentralized Autonomous Organization) is a form of organization that can operate autonomously without intervention and management through a set of open and fair rules. The financial transaction records and program rules of a distributed autonomous organization are kept in the blockchain. From a technical view point, DAO is a social organization that is not subject to central governance and is controlled by the organization members, which is represented by transparent computer program coding rules; from a practical view point, DAO is an online community of like-minded people who can form organizations, create missions and decide how to fund DAO missions collectively.
Compared with the traditional governance model, the operation model of DAO has the advantages: Firstly, DAO is decentralized decision making without managers. The organization members can directly and quickly influence the decisions, which is more democratic; Secondly, it is community-driven. Each token holder in the community can submit motions, improve suggestions, initiate changes, and further develop the agreement; Furthermore, it is transparent and efficient. Anything that happens in DAO is recorded on the blockchain, and can be checked at any time. The rules and policies of DAO are used through blockchain smart contracts to automatically execute decisions, which can improve the operational efficiency.
However, for DAO to take advantage of its governance model, its application must be completely decentralized, otherwise the DAO’s decisions and suggestions still cannot avoid the interference of the centralized organization or individual behind the application. Then the DAO has no ownership of the application, including the right to control, deploy, and know. The real value of the DAO no longer holds. Based on this situation, Ethanim combines the DAO with the own core component RSM to completely decentralize the application, allowing the DAO to truly take control and participate in the running of the application.
In order to solve the problem of low consensus efficiency of blockchain nodes, Ethanim has created an original blockchain solution based on trusted computing. It places the server side of metaverse applications containing complex logic calculations in a trusted environment by building a trusted state machine RSM (Reliable State Machine), and introduces validators to validate the trusted state of the RSM by consensus validation. It greatly improves the consensus efficiency of the nodes. Besides, RSM is deeply integrated with DAO governance mode. RSM can monitor the application running status in real time. Any DAO members of Ethanim-based metaverse applications (e.g., GameFi) can access the monitoring log to understand the application running.
During the actual running of the metaverse applications, RSM will assign full ownership of the application to the DAO, and authorize the upgrade and deployment of the application according to the rules set by the DAO. If the DAO has a proposal to modify the rules, RSM will automatically open the developer’s upgrade permission only after the proposal is passed. And if the developer closes the application, RSM will release the permission to redeploy the application according to the “successor in line” in the DAO regulations, so that the DAO can fully control the metaverse application.
Looking back on 2021, the boom of NFT, GameFi, Web3.0 and metaverse extended the application scenario of DAO to numerous fields, including development tools, services, social contact, media, creation, collection, and the whole DAO reached a new height. Over 40 DAOs were established in 2021. The pace of DAO establishment and development has accelerated since Q4. Many well-known organizations and governance solutions of DAO won the favor of capital. As a metaverse infrastructure platform, Ethanim will help applications within the metaverse ecosystem run more democratically, efficiently, transparently, and robustly by introducing itself to the DAO governance model. It enlivens the development of the metaverse and enters the metaverse 2.0 era together.
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