2022 is going to be the year of Metaverse and DAO. A DAO is one of the key requirement in any Metaverse. But What is DAO in Metaverse?
DAO or Decentralized Autonomous Organization in Metaverse is an autonomous organization owned by the token holder of that metaverse which is responsible for running and maintaining the metaverse.
In this post, I am going to explain everything about DAO in Metaverse in a simplified manner. You will get to know the understanding of how DAO works, how it is different from traditional organization and detailed explanation of DAO in different Metaverses.
FULL FORM OF DAO
The full form of DAO is Decentralized Autonomous Organization
WHAT IS A DAO?
Basically, DAO is an organization that runs on codes (smart contract) that is agreed upon by its members. A DAO is collectively owned and managed by its members without a centralized leadership. A DAO uses blockchain technology.
DAO is Member-owned communities without centralized leadership.
You might wonder how an organization runs on codes. Actually the codes are smart contracts. A smart contract is a collection of code that runs on blockchain technology. A blockchain is digital ledger or account book.
WHAT IS DAO IN METAVERSE?
DAO in Metaverse has a similar meaning. All the individuals of the meterverse automatically become members of the DAO.
In Decentraland, the holders of MANA and LAND are members of Decentraland DAO. In Sandbox, the holders of SAND token are members of Sandbox DAO. You can get a whole list of DAO of Metaverse from here.
TRADITIONAL ORGANIZATION VS DAO
Big companies like Google, Meta, Amazon, etc or it can have any organization have board members. Big and crucial decisions are taken by the board members. The decisions taken by the board members are transferred to the CEO of the company to make sure the decision is followed and implemented.
It is quite similar in DAO. But in a DAO in metaverse every member of the DAO takes part in decision making. Any decision is taken if the majority agrees.
HOW DOES DAO WORK?
DAO works using smart contracts. Smart contracts contain sets of code or instructions that run on blockchain. All the members in a DAO make or amend some rules of the organization. The rules written in smart contact in form code.
The smart contract contains every rule and regulation of the organization. Once the smart contract is live in the blockchain, nobody can change it unless by DAO’s vote.
If any member of DAO in metaverse, want to change something, he brings up proposals. These proposals are put for voting process. If it wins majority vote then the changes are applied otherwise not.
DAO IN DIFFERENT METAVERSE
It would be vague to know about DAO without knowing the real life example of DAO in metaverse. So, in this section I have explained some of the DAO prevalent in different metaverse projects.
DECENTRALAND DAO
Decentraland is a famous metaverse project. It is the first metaverse to be fully decentralized. Decentraland DAO is an important example of DAO in metaverse.
The holders of MANA token and LAND token are the members of Decentraland DAO. But each member will have a different voting power (VP). The voting power depends on the amount of MANA and LAND an inhabitant of Decentraland holds.
Voting Power in Decentraland DAO
At present Voting Power (VP) in Decentraland is given below.
| Token | Voting Power (VP) |
| 1 MANA | 1 VP |
| 1 LAND | 2000 VP |
Types of Decision by Decenetraland DAO
The following types of decision can be taken by the members of Decentraland DAO.
- Point of Interest (POI)
- Name Ban
- Catalyst Nodes
- Poll
THE SANDBOX DAO
The Sandbox is a popular metaverse project. The Sandbox DAO is an important example of DAO in metaverse.
In Q2 of 2022 Sandbox DAO will come to effect. The holder of SAND, LAND and AVATARS token holders of Sandbox Metaverse will be the members of the Sandbox DAO. The Sandbox DAO will allow members to participate in major decisions.
The holders of Sandbox token can vote themself or delegate his/her voting powers (VP) to another player of his/her choice.
Types of Decision by Sandbox DAO
As of now there are limited decision that can be taken by Sandbox DAO. They are listed below.
- Foundation grant attributions to content and game creators
- Feature prioritization on the platform roadmap.
AXIE INFINITY DAO
At present, the members of Sky Mavis (the company behind Axie Infinity) has the voting power (VP) in Axie Infinity DAO. But, by 2023 the holders of AXE- token of Axie Infinity will have all the voting power.
The AXE token holder will decide the future of Axie Infinity in 2023. As of now, a gradual shift will be made to the AXE holder to take small decision.
Voting Power in Axie Infinity DAO
As of now in 2022, 1 AXE will be counted as 1 VP. But, there will be proposal for 1 AXE to be counted as 4 VP by the Sky Mavis team.
Decision to be taken by Axie Infinity DAO in 2023
The following decision will be taken by AXE holder in 2023.
- Should Axie Infinity Limited continue to pay Sky Mavis to develop Axie Infinity?
- Should Axie Infinity use the marketplace created by Sky Mavis?
- How should the Community Treasury be used to reward AXS holders and the broader Axie community?
- Should the Community Treasury funds be attached to any yield farming/staking services such as Yearn.finance or Rari.Capital?
MY NEIGHBOR ALICE DAO
My Neighbor Alice DAO is an important example of DAO in metaverse . My Neighbor Alice is one of the famous metaverse projects.
The token in My Neighbor Alice Metaverse is ALICE. By holding an ALICE token you can participate in the governance process through the Community Council.
The decentralized autonomous organization(DAO) in My Neighbor Alice is called Community Council.
Voting Power in My Neighbor Alice DAO
Generally, every holder of ALICE token becomes a member of My Neighbor Alice DAO-Community Council. But, membership is optional. It depends on the ALICE token holder to participate in the DAO voting or not.
In order to encourage voting, reward is also given to voters.The DAO of My Neighbor Alice is implemented in Chromia.
| Token | Voting Power (VP) |
| 1 ALICE | 1 VP |
Decision taken by My Neighbor Alice DAO
In due course of time, the majority of the decision taking powers within the game will be handed over to the ALICE token holder. By then the following decision can be taken.
- Use of revenue
- Game Development
- Growth of My Neighbor Alice
- In-game issues
- Future funding.
- Issues related to the platform operations and development
BLOCKTOPIA DAO
The native token/currency of Blocktopia is BLOK. It is used to buy ADBLOK and REBLOK NFT. Only the holders of REBLOK NFT holders will form part of the Governance council.
Voting Power in Blocktopia DAO
Each holder of REBLOK NFT will have 1 voting power. Proposals will be made to the DAO where NFT holders will vote with the majority vote winning.
| Token | Voting Power (VP) |
| REBLOK NFT | 1 VP |
Decision taken by Blocktopia DAO
- Proposals on Game Modification and Environments
- Tenancy Agreements
Advantage of DAO
There are many advantages of DAO in the metaverse. Each one of them is explained in detail.
Trustless
Truthfulness is the biggest benefit of any DAO in metaverse. Since DAO is built on decentralization and not headed by any central authority or founder or creator. It doesn’t matter who is involved in the organization or not.
Can’t be Shut Down
The DAO in Metaverse can’t ever be shut down. Since DAO is decentralized and the token holder can run, manage and control it. There is no central authority or no central server. The government or any agency can’t ban or close it.
Since there is no central server, nobody can shutdown the DAO in metaverse. Only a way of shutting down a DAO is by its member. If more than 50 % of the members vote for shutting any DAO, they can do it.
Open Source Code
The code behind any DAO in metaverse is open source code. Anybody can look into its code and improve upon it. Open source code is usually reliable as other programmers can help the main developer to find flaws and improve the code.
So, any member of DAO in metaverse can propose suggestions to add or edit code in the DAO proposal.
Earning Potential
The members of DAO have huge earning potential and get access to many premium features of the DAO.
The members of DAO earns fiat currency or token every month. This can be treated like salary.
Disadvantage of DAO
Alongwith the advantage, there comes some disadvantages of DAO. All of them are explained in detail..
DAO are not fully Decentralized
In the infant stage of building any metaverse application, initial funding is done by VC and large companies. They are the major token holders. So, if they are major token holders and less token is in the hands of the public. The voting power shifts in their hand although the voting process is made through DAO in metaverse.
Vulnerable to Attack
Since the code of DAO in metaverse is open source. So, anybody can read it and reverse engineer it. They can find loopholes in the code and plan attacks to disrupt the entire DAO in the metaverse.
You can find example of attack in many DAOs like The DAO, Badger DAO, etc
No Business Secrets
Lot of money is put into research and development of building any metaverse project. It is assumed that one day these research and development will provide a big pay off in future.
But in any DAO in metaverse there are no business secrets. Somebody can copy your code and idea and build a better version of it.
CONCLUSION
Summing up, you have come to know in detail about DAO in metaverse. I have explained some of the DAO in popular metaverse projects like Decentraland, The Sandbox, Blocktopia, My Neighbor Alice, etc. You have also come to know about the advantages and disadvantages of DAO in metaverse.
