Cherry Network Follow Feb 28
· 8 min read Cherry — A Decentralized Autonomous Organization (DAO) As the blockchain revolution picks up steam, an abundance of innovative applications are emerging in the crypto space.Decentralized finance or DeFi, GameFi, and non-fungible tokens (NFTs) are all disrupting a huge swath of legacy institutions.With the emergence of these blockchain-based decentralized protocols and applications has come another piece of critical blockchain infrastructure — the decentralized autonomous organization or DAO.
Cherry was founded on the principle that it would evolve into a fully decentralized autonomous organization owned and operated by its community.As the Cherry Project moves closer to mainnet, the progress towards a democratic and transparent voting system continues.This DAO governing system allows all stakeholders to get involved in shaping Cherry’s future.
What are DAOs? Simply put, DAOs are networks of people brought together through common interests and aligned objectives or goals.Run almost entirely by code, lacking a single point of failure, and significantly reducing governance coordination costs, DAOs provide everyone with an interest in a decision to have their voices heard.
DAOs were born out of the developments of blockchain technology that enables participants to take decisions cooperatively.In legacy corporations, stakeholders elect officials to a board of directors who oversee a management team handling operations; however, in a DAO, every member has the opportunity to transparently vote on each and every action of the DAO as defined by the governing protocol.In this regard, the potential for average individuals to participate in the steering of the organization adds tremendous value to their communities.
By spreading the decision-making process among the entire community, DAOs foster unparalleled alignment with the organization’s goals.
DAOs have a very brief, but storied history.The most infamous example of a DAO was one known simply as ‘The DAO’ emerged in 2016.It provided the first insight into how a digital-native, decentralized organization could govern itself entirely by code.Built on Ethereum, participants supplied Ether (Ethereum’s native cryptocurrency $ETH) and received DAO tokens in return.These DAO tokens represented the participant’s economic interest as well as their voting rights.The DAO allowed all participants, no matter how big or small their contribution, to participate in the governing process of the organization.
Much to the movement’s chagrin, a critical smart contract bug allowed a bad actor to drain all funds from the smart contract.This led to the hotly-contested decision to hard fork the Ethereum network.
DAOs may have gotten off to a rocky start, but since the failure of The DAO, many innovative and exciting projects have improved on the concept and centered their governance decisions on DAO structures.Decentralization is a critical component of blockchain infrastructures, yet many blockchains still have vertical governance processes.That is, decisions are made in a centralized manner from the top down.
Cherry holds that without a flat, DAO-based governance structure, a blockchain cannot achieve true decentralization.
How do DAOs work? The underlying infrastructure of the DAO is self-executing computer code that enforces predetermined conditions and subsequent actions on the blockchain.They permit trustless transactions and agreements between anonymous parties without the need for third-party arbitration.
Once the contract is live on the blockchain, no single individual or entity can change the rules except by vote.Because the entire governing process is transparent and public, if one were to try and perform a function that is not covered by the rules of the contract, that action would fail.In the case of a DAO, the smart contract defines the rules of the organization and holds its treasury of tokens.
Almost all DAOs utilize token voting rights meaning one token equals one vote.With the token model, participants are economically tied to the DAO through, for example, fee collection from the platform or communal investment decisions.
Token ownership also allows members with greater financial stake to have proportionally greater influence over the decision-making process.DAO membership is verified through wallet snapshots in which a record of a holder’s cryptocurrency wallet is recorded at a specific time to show that the individual owns the governance tokens associated with the DAO itself.
In establishing a DAO, there are many critical questions faced by developers and participants: What decisions are to be made by the DAO? Under what circumstances should the DAO be formed? What are the important governance tasks required? What techniques and innovations can be deployed to make administration of the organization easier? What financial incentives can be employed?
When we have a better understanding of the answers to these critical questions, we can begin to gain a better grasp of some different types of DAOs being utilized today, including Cherry’s DAO aspirations.
What are some types of DAOs? An ever-increasing number of emerging platforms and networks are being built using the DAO structure.While much of the development has been focused on DeFi protocols, new DAO use cases are popping up seemingly daily.Given the increasing number of use cases, a DAO, today, may be regarded as the convergence of investment banks, companies, social clubs, art galleries, developer networks and more.
The most common use cases of DAOs to date include protocol governance, digital art collection, investment management, social club regulations, grant development, and gaming guilds.
Let us take a closer look at how DAOs are utilized within each use case:
Protocol Governance Protocol governance DAOs allow participants to propose and vote on stipulations that influence the development and policies of the protocol.To encourage long-term participation, some governance DAOs may offer fee-sharing through governance tokenization.
Digital Art Collection Digital art collection DAOs curate non-fungible tokens (NFTs) from an array of projects and artists.
Their objective is to seek greater market accessibility for creators who create censorship-free expressions of art.NFT DAOs also allow participants to gain exposure to the most valuable NFT projects that have become out of reach of ordinary investors.
Investment Management Investment management DAOs typically pool assets of their participants together in order to enter into promising investment opportunities.
The DAO will pre-set rules regarding the investment decisions such as expected return, timing of investment, or stop loss levels and so on.When a certain event is triggered, the DAO distributes the profits among its participants.DAOs are also trickling into the venture capital realm as well.
Social Clubs Social club DAOs provide exclusive access to clubs or social communities that often require token ownership to gain access.In these cases, the tokenization usually represents your buy-in to the community, but you often have to gain acceptance by performing certain tasks on a social media platform such as Discord.
Upon acceptance, members will generally ascribe to the network’s broad vision.
Grants Grant DAOs create a community of like-minded builders and developers who wish to further blockchain initiatives.These DAOs act as a decentralized meeting place for contributors to share ideas, developments, and connect with similar goals in mind.Grant DAOs often host things like hackathons and bug bounties that aid in furthering the web3 movement.Grant DAOs differ from investment DAOs in that grants typically do not look to profit from their ventures, while investment DAOs are more profit-oriented.
Gaming Guilds Gaming guilds are the relatively new kid on the block after emerging from the play-to-earn (P2E) craze that has been sweeping crypto since mid-2021.
The rise to prominence of Axie Infinity and its multi-billion dollar market cap has led to an explosion of games in which players play to earn crypto tokens within the game.Gaming DAOs unite players from around the world who cooperate and share profits from playing a widerange of P2E games.
Aside from the aforementioned types of DAOs, these decentralized governance networks are transforming the world in a wide array of use cases:
The metaverse: Virtual worlds of the present and future will be fully governed by DAO networks that decide on the rules and law governing the metaverse.
Fan Ownership: Fans of European football clubs such Barcelona and PSG have been given some decision-making leeway through a DAO structure.
In the U.S, a DAO has been established with the primary objective of purchasing an NBA team.
Insurance: DAOs operate by pooling a community’s resources in order to leverage economies of scale and mitigate risk.This is similar to how insurance companies operate, so it only stands to reason that these companies are now exploring DAO structures in order to lighten their exposure to risk.
The aforementioned are just a few examples of DAOs in their nascent stages.Cherry takes the lessons learned from past DAO experiences and combines them into a layer-one blockchain governed by you, the community.
Cherry — the future of the DAO Cherry is not just a blockchain project; it is a movement.
It is a layer-one blockchain that aims to bridge Web3.0 applications with a fully-decentralized file storage system through a DAO governance system that is composable across all other blockchains.
It is the firm belief of the team behind Cherry that we are just scratching the surface of how DAOs are going to creep into everyday society.DAOs have the massive potential to disrupt all walks of life as current hierarchical structures are challenged.Corporate leaders may begin to lose their grip on power as the employer-employee relationships we have grown accustomed to begin to shift more in favor of the employee.
Cherry Labs, the incubator that specializes in blockchain products and applications, has been established to help further the DAO movement within the Cherry ecosystem.Projects that are designed to utilize a DAO structure, such as censorship-resistant digital art platform Cherish, will always be favored over projects with a centralized governance solution.
Blockchain and smart contract technology are developing at an exponential rate, and it only stands to reason that DAO processes will continue to improve along with it.
Cherry aims to be at the forefront of the DAO revolution.DAOs have only been around for six years.Where will they be in six years time? Cherry is not only going to be here to find out, but also here to shape the future of the DAO.
Get involved! There are many ways to get involved with the Cherry Community, whether you’re a large or small investor, a developer or a creator who wishes to join the Cherry Ecosystem.
As we ready our testnet for launch, many innovators are getting in touch to leverage the unique capabilities of the Cherry infrastructure.Potential partners who are interested in a trustless, business-ready interface to decentralized file systems can get in touch via our social channels or [email protected] to learn more.Among the available opportunities is a spot in our Cherry Labs program, where we incubate innovative startups who build on the Cherry stack.
Join the Cherry Community If the Cherry mission of providing a truly trustless distributed file storage for decentralized applications speaks to you, then get in touch! Cherry’s technical overview can be explored by checking out the Cherry Lightpaper .
We’ve brought together a community of technologists, artists, and creators, and we want you to get involved.If this speaks to you, we invite you to join our growing community.
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