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Why the DAO Model Is the Future of Governance | Bankless Africa Newsletter
This is Bankless Africa Newsletter, a newsletter that helps you stay up to date with well-curated news about crypto and Web3 around Africa.
Hey Bankless fam!
Can you feel the excitement?!
Yes! Well, it has been an exciting week as everyone looks forward to the Ethereum Merge — the next big thing that’s going to happen in the crypto world. The countdown has started and if everything goes on well, the Ethereum developers expect the Merge to happen during the week of September 15th, 2022. So let’s sit tight and look forward to the amazing ride.
In this week’s editorial, we find out why the DAO model is so important for the future of governance as we delve into the review of traditional corporate governance.
This week, we had the WOO network Nigeria partnering with us for their Crypto Meetup happening in Lagos, Nigeria. The blockchain event, which promised to be fun, educational, and entertaining, did not disappoint. There was so much mind-blowing content on the topics of bitcoin, cryptocurrencies, and blockchain technology.
In our latest podcast episode, we had Kode — the CEO and Co-founder of RevewZ — talk with us about RevewZ platform, which offers a decentralized review system hosted on the Polygon blockchain. We hope you do have a great time listening to the episode.
It’s exciting to see how Metaverse Magna raised $3.2M at a $30M valuation to build Africa’s largest gaming DAO. Speaking of Africa, we also see Bitso partnering with Africa to aid crypto remittances between Canada and Mexico. It is so nice to see a lot of crypto activities going on in Africa.
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📰 News & Opinion In and Around Africa
Author: Chayanika Deka
Talks are at early stages between Binance and the Nigeria Export Processing Zones Authority, NEPZA, as the body sets to partner with the crypto exchange to develop Nigeria's first digital economic zone. With this, they aim to scale crypto and blockchain-related businesses across Africa.
NEPZA had an early discussion with the technology infrastructure company, Talent City, to build Nigeria's “Virtual Free Zone”. These moves are geared by narratives to leverage the possibilities in Africa to spark digital economic progress.
In addition, this level of progress is being seen as possible as Nigerians in general are currently considered to be the most crypto-curious across the globe, with a wide range of crypto adoption despite the fall in the price of assets.
Author: Tage Kene-Okafor
Nestcoin raised and completed a pre-seed round to build and operate Metaverse Magna (MVM). The organisation welcomed contribution from investors, saying that the fund will expand efforts to build "Africa's largest gaming DAO,“ and as well giving high opportunities to the gamers. Due to the yearly high purchase increase in consoles and in-apps, MVM also visualise games as a way of introducing more people to Web3.
Furthermore, in regards to great opportunities for youths, especially in Africa, it aims to reduce the rate of unemployment and provide a medium to offering scholarships to most gamers.
Also, without a proposed launching date, the organisation is said to be building a social gaming app, Hyper. The gaming DAO platform intends launching some Web2 games as well.
Author: Terence Zimwara
Authorities in Nigeria have been urged to upgrade the nation's cryptocurrency regulatory requirements due to the fact that the country's present regulations do not reflect the reality on ground.
Legal professionals claim that because Nigerians are becoming more interested in cryptocurrencies, the nation has to have "clear-cut norms" for the sector. The experts stated that such an improvement is required since Nigerians have generally disregarded the current restrictions which were intended to hinder commerce or investment in cryptocurrency.
In addition, a recent survey revealed that people in the West African nation have the greatest interest in cryptocurrencies worldwide.
Bitso Partners with Africa to Facilitate Crypto Remittances Between Canada and Mexico – Nation World News
Author: Nation World News Desk
Bitso, one of the top Latin American crypto platforms with over 15 million users, partners with the Africhange platform to solve cross-border trading problems, thereby creating a less complex and easy to use and fast trade method. This partnership tends to eradicate problems associated with transfer speed, cost, and rate of exchange.
This partnership aims to add more life to the current crypto use cases which include cross-border exchanges and payments. Bitso has done transactions worth over 1 billion dollars in crypto, aiming to process at least 10% of exchanges and trades from the US to Mexico.
Africhange, with immigrants in mind has made it a lot easier for its users, through the reduction of transaction costs while still helping users leverage blockchain technology.
Author: News Desk
Compared to the latter periods of the past year, 20% of internet users in Ghana who are 18 or older already hold cryptocurrencies. This type of cryptocurrency ownership is more common among men in Ghana.
Among Ghanaian cryptocurrency owners, Bitcoin (54%) and Ethereum (20%) are the two most popular coins, and a cryptocurrency expert at Finder says he's amazed adoption hasn't decreased considering the significant dip in the cryptocurrency market over the past few months.
Ghanaians may be using cryptocurrencies as a safety net against inflation and a declining local currency.
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Why the DAO Model Is the Future of Governance
Decentralised autonomous organisations have introduced an evolving approach which differs to governance in the corporate world. DAOs are essentially member-owned communities with decentralised leadership. Many DAOs operate with a strong focus on blockchain technology, and can be considered online companies that are run and owned by its members as a group. They have internal treasuries that nobody may access without the consent of the group; this ensures that every member in the organisation has a voice in decision making. These decisions are made by votes on Forum proposals, Snapshot and polls on Discord.
Every member of a DAO usually has a shared objective and makes an effort to behave in the best interests of the organization, as there is no central governing authority. DAOs employ a bottom-up management structure to make choices, and they have gained popularity among crypto users.
According to the data compiled by Snapshot Labs and shared by Electric Capital Engineer, Emre Caliskan, over the past 12 months the total number of DAOs has increased from 700 in May 2021 to 6,000. The number of governance proposals submitted has increased 8-fold and similarly the number of votes cast has increased from 448,000 to 3.7 million.
This entire growth is a striking demonstration of faith in the DAO governance model.
Traditional Corporate Governance
The majority of organisational structures call for seamless cooperation between everyone involved. Any significant break from this coherence could lead the organisation as a whole to malfunction. Traditional organisations frequently employ a hierarchical structure to maintain order, with those at the top making decisions that those at the bottom adhere to. This top-down pyramid structure effectively divides responsibilities across a huge workforce by clearly specifying the roles of each member.
The traditional corporate form has mostly not changed, and businesses have strengthened centralised frameworks with top-down controlled administration. Despite the benefits, there are several ways that this approach might be restrictive. It frequently lowers job satisfaction and prevents workers from connecting their objectives with those of the organisation. This model may also restrict creativity and hinder teamwork.
In contrast, the modern concept of decentralised governance represents a significant advancement marked by enormous opportunities and, of course, has its own limitation in equal proportion.
Importance Of The DAO Governance Model
The DAO governance model encourages:
Rather than a central authority dictating how an organisation should operate, decisions that have an impact on the group are made by the group. A DAO can decentralise power among a far wider spectrum of users than a single individual or a small group of people or boards of directors could.
When members of an entity have a direct voice and the ability to vote on all issues, they may feel more energised and connected to the entity. Even while these people may not have a lot of voting power, a DAO enables token holders to vote, burn tokens, or utilise their tokens in ways they believe are best for the organisation.
This governance model allows for open and honest communication between all members and encourages active participation and contribution.
The DAO runs on the blockchain and under a set of rules integrated into smart contracts. Operations and voting are made publicly available for transparency and decentralisation of authority. The majority must approve changes in DAOs by voting, encouraging transparency and minimising bad decisions that could harm the organisation.
Open Management of Funds
DAOs encourage the fair allocation of funds and financial rewards. DAOs establish an open and mutually beneficial system whereby each member knows the reasoning for each action that impacts them, as opposed to a limited group of strong individuals making decisions about how money is spent and how employees are paid for their services.
DAOs thereby eliminate many of the administrative and hierarchical barriers that hinder innovation and cause employees to be dissatisfied with their positions within an organisation.
The Future of Corporate Governance
The corporate governance structure is steadily experiencing a revolution, and DAOs are making modest progress toward figuring out a successful strategy. Although some processes are still under incubation, they can be practical tools for empowering people and fostering collaboration. Even if DAOs have not yet fully fulfilled the path to decentralisation, thoughtful reflection can help to further enlighten the way.
Considering that the evolution of this paradigm in the case of DAOs entails both learning and unlearning, it is imperative to proceed with caution. Members should be conscious of, and responsible for, the concepts and procedures that are included in their new collaborative dynamics when creating DAOs. Developing this area with sustainability, diversity, equity, and inclusion in mind is our responsibility.
The benefits of the approach can be employed by different fields, even though it may appear to some that it only applies to specialised blockchain and cryptocurrency businesses. The DAO will, without a doubt, require a blockchain solution to support the necessary governance and transparency, but this does not obligate the DAO's goods to be blockchain-based or related.
However, envision a world where every business operates as a DAO. This eliminates some of the dangers associated with dealing with corporate body counterparties today. Senior management, vested with a great deal of trust in traditional corporate structures, lose their tight grip on authority, as every member now has an opportunity to voice their complaints and make suggestions.
The risk associated with one individual’s decisions can be decreased by implementing a DAO governance structure since it lowers the level of trust placed in an individual authority.
🥷🏾 Airdrops Hunter
📚 Learning Centre
Crypto wallets are the key to accessing a whole new world of financial tools and services and require safekeeping and care. Your crypto wallet is your gateway to DeFi and DAOs, but many users still struggle with managing their wallets in a smart way. If you've been looking for a resource that can teach you how to manage your wallet then this is for you.
🇰🇪 ETH SAFARI
You're not going to want to miss out on this event!
ETH Safari is the first Ethereum Conference and Hackathon of its kind in Africa; it promises to be an unforgettable experience for anyone who wants to learn more about blockchain technology.
Save the dates as it is happening on the 18-24 September 2022 in Kenya!
The conference will have a hackathon with impressive prizes and there will be talks by local, regional, and international speakers in Web3.
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