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DAOstack Project Review: The Future of Decentralized Autonomous Organizations?

DAOstack has been dubbed the Wordpress for DAOs. They aim to catalyze decentralized companies, funds, and markets to collaborate and take fast, innovative decisions at scale.

DAOstack Profile

Platform Ethereum
Rating 4.32/5
Grade A
Industry Blockchain Services
ICO Price 1 GEN = $1
ICO Bonus _____
ICO Soft Cap $5 million
ICO Hard Cap $30 million
Supply 100 million GEN
Website https://daostack.io/
Whitepaper DAOstack Whitepaper
Social media DAOstack Telegram Twitter Reddit

DAOstack Rating

Let's decrypt DAOstack Use Case


What Problem is DAOstack Addressing?

The advent of blockchain has made it possible to create open, reliable, and decentralized systems, consequently leading to the creation of the Decentralized Autonomous Organization (DAO). DAOs are open, decentralized, and self-organized networks coordinated by crypto-economic incentives and self-executing codes. Put differently, these networks are not controlled by any single individual or organization.

In comparison with traditional governments, this seems like a quantum leap in the right direction. Coordination of large and even small groups in the bid to point them towards collective action is often based on traditional top-down hierarchy, as evident in the military, government, corporate organizations, and even families. And there's no arguing the fact that it is easier to point the ship in a single direction when there is only one captain.

Despite the obvious benefits of top-down hierarchies, they are fundamentally flawed because individuals can be subject to bad judgement, bias, or bad influence. Also, as in the case of corrupt governments, the interests of a few powerful individuals may supersede that of many less powerful individuals.

This flaw in traditional systems and the idea of eliminating middlemen and bosses, as well as replacing centralized mechanisms with decentralized systems has made DAOs popular. The mere thought of having hundreds and even thousands of people working together to solve major world problems without any hierarchy of command seems promising. Decisions will be made through the wisdom of the crowd, and rewards are distributed based on the value contributed.

Unfortunately, blockchain tech and DAOs are still in their infancy stages, and DAOs in particular still remain a largely abstract idea, because there are a handful of limited use cases. In addition to lack of widespread adoption, one of the biggest challenges of DAOs is inefficiency.

As earlier referenced above, it is easier to move a ship in a single direction if there is only one captain. While decentralized applications may be giving everyone in the system a voice, decision-making processes will become susceptible to noise (a situation where everyone is talking and trying to steer the ship in his own favor). Such a scenario makes it difficult, if not impossible to reach consensus.

Additionally, there is a programming barrier in the execution of Ethereum smart contracts. Developers and users need to be familiar with Solidity in other to execute smart contracts. This is arguably one of the barriers to widescale adoption and implementation of smart contracts.

DAOstack aims to solve this problem that is bound to arise in DAOs, by building a decentralized governance system for these organizations.

DAOstack Value Proposition

In line with the inherent problem of DAOs, solving it would require a technology or system that tallies and manages collective attention. Questions like who can make a proposal and how, need to be answered. Also, which proposals out of the possibly numerous proposals should get the attention of voters? Who has the right to vote and what are the criteria towards deciding this – reputation or subject-matter credibility?

Upon answering all of these questions, a critical aspect that should not be neglected is vulnerability to corruption. That is to say, decisions or voting power within these decentralized networks should not be easily bought or sold; everyone should be incentivized to work towards the greater good.

DAOstack provides the framework for answering the questions and for the creation, governance, and interoperability of DApps, DAOs, and Web companies. With the framework, content creators, freelancers, and individuals with relevant skillset can cooperate in producing DApps.

According the DAOstack architect, Matan Field, "The first principle of designing the DAO stack was not to build a specific protocol or a specific application, but rather to build the soil, the ground from which a whole ecosystem can grow and thrive."

With this in mind, DAOstack provides a sandbox for experimentation of different governance structures for DAOs. Each DAO can customize its own governance structure; add and remove certain elements, define agency functions, and specify what can and can't be done. Additionally, DAOs have the ability to manage, maintain, and curate their own collective databases.

One of the main components of DAOstack is its reputation scoring system. This allows for a fair decision-making structure in decentralized organizations. By integrating a reputation assignment system, DAOs can assign reputation scores, which are non-transferable to its members. In order to increase in ranking, members have to make positive contributions to the DAO.

DAOstack is also working to remove the learning barrier present in using Ethereum's native programming language, Solidity. Many developers are still illiterates in this regards because of the infancy of blockchain tech. DAOstack's solution is a valuable service, as many developers who are keen to enter the industry can create decentralized applications using JavaScript.

DAOstack's technological stack comprises of:

Arc: This is the base layer of the stack and comprises of a framework for governance. It is a library of smart contracts that can be modified, mixed, and matched to create, deploy, and operate governance protocols for any given DAO on the Ethereum blockchain.

Arc.js: Arc.js is a JavaScript library which allows front-end developers to easily build apps on top of Arc without being familiar with Solidity.

DApps Layer: DAOstack has envisioned individuals and developers building decentralized applications on their platform.

Alchemy: Alchemy is the first browser DApp built on the stack. Its function is to enable interoperability between DAOs and other applications in the ecosystem.

Archives: These are a set of public and shared registries gathered by the community to enhance interoperability and collaboration within the ecosystem. DAOstack is starting with 3 key registries; the Hive, Compendium, and Mosaic

DAOstack Leadership Team

DAOstack is made up of a decent and balanced team with experience spanning from entrepreneurship, to blockchain, and academic backgrounds. Currently, there are 7 members and two advisors, mostly based in Israel.

The CEO and Architect is Matan Field who has a background in education, with a Ph.D in Theoretical and Mathematical Physics from the Weizmann Institute of Science. He has worked as a research fellow at the Technion-Israel Insitute of Technology. He also has a strong entrepreneurial and blockchain background, having co-founded La'Zooz (a decentralized collaborative transportation system) and Backfeed (a social OS for decentralized organizations).

Adam Levi is the CTO of the organization. He has a Ph.D in Physics and has worked as a radar engineer at the Israel Defense Forces.

On their team of advisors are Jordan Greenhall and Seth Taube. Greenhall is the co-founder and former CEO of DivX, and also has affiliations with Harvard law School and Backfeed. Taube on the other hand is the CEO of Sierra Income Corporation and Director of Medley Capital Corporation.

DAOstack Target Market

Considering the fact that blockchain tech is still at its infancy and it is expected that as more and more individuals and institutions adopt the tech, there will be a need for some structure in governance. DAOstack is positioning itself to tackle this need when it arises. It is expedient to note that some various blockchain projects are already integrating the services of DAOstack. Some worthy mentions on the list includes Sapien, Gnosis, Menlo, iAngels, and NfX.

Competition in the marketplace is quite stiff. Aragon which as a market cap of $77 million is DAOstack's direct competitor. Aragon already has a working product that allows the creation and management of organizations on the Ethereum blockchain. Other competitors include DigixDAO and Maker.

DAOstack roadmap

DAOstack already has a MVP – Alchemy on the Kovan Ethereum Testnet, which was released on Mainnet along with the crowd-sale. With regards to the entire stack, they have the full DAO stack architecture and the Arc framework for governance. Other upcoming milestones on their roadmap includes:

  • Genesis Release and Pilot Program in Q4 2018
  • Release of a second version of Alchemy in Q1 2019
  • Genuine Release in Q2 2019
  • A third version of Alchemy in Q3 2019
  • Generosity Release in Q4 2019

DAOstack SWOT Analysis

Strengths

  • Active code development
  • Strong team and advisory board
  • Lucrative market
  • Effective token structure
  • Partnerships with other solid blockchain projects

Weaknesses

  • Untested market
  • CEO Matan failed with Backfeed, a similar project

Opportunities

  • DAOstack are at the forefront of solving the problem of decentralized governance. Pulling through will send them to the skies.

Threats

  • Highly competitive landscape

Conclusion

In general, DAOstack is a promising and exciting project. They have been able to reach a remarkable stage in product development. As with most blockchain projects, competition is stiff in the marketplace. However, considering the fact that blockchain tech is still new, we can only but hope that the team pulls through.


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Disclaimer: The information contained herein is not intended to be a source of advice and the information and/or documents contained in this website do not constitute investment advice.

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