1% of Holders Control 90% of Voting Rights in DAOs
Decentralized autonomous organization (DAO)
Modified Date:- Published Date:-Categories: Cryptocurrency
1% of Holders Control 90% of Voting Rights in DAOs
According to data from research firm Chainalysis, a user needs somewhere between 0.1 and one percent of a decentralized autonomous organization (DAO)'s total token supply to make an offer and between one and 4% to pass such an offer. Should be kept in between. DAOs are basically established organizations without a centralized hierarchy and are intended to work from the bottom up so that a community can collectively contribute to the decision-making process.
However, recent data shows that they are not operating in the decentralized manner as they were intended. The report highlights that although all Governance token holders had voting rights, the right for the community to create a new resolution and pass it on was not as easy for everyone, as voting within each token organization corresponded to a set amount of power.
Chainalysis estimated that one in 1,000 and one in 10,000 governance token holders had enough tokens to make an offer. It was even more difficult to pass a resolution, in which only one in 10,000 and one in 30,000 holders had enough to do so.
The DAOs are all the rage
As DAOs become increasingly popular in the ever-growing crypto ecosystem, they are often seen as the future of decentralized corporate governance.As such, regulating them is just a matter of time, as Australian pro-crypto Senator for NSW Andrew Bragg argues. Bragg has said that DAOs pose an “existential threat to the tax base” since they are recognised as partnerships and as such are not liable to pay company tax.
A DAO is a decentralized organization that runs on the Ethereum blockchain. The goal of the DAO project is to develop a voting system that can handle large-scale voting systems, as well as identity creation and management.