DAO Vaults — Why Is Beneficial To Store Assets In Them
Investors who seek to enter the cryptocurrency space more often than not tend to turn to centralized exchanges as the most common means of doing so. Yet that system comes with its own downsides.
With centralized cryptocurrency exchanges users rely on a third party to help sort their assets and conduct transactions. They trust the exchange to handle their assets for them — it is a common setup, seeing as how an exchange can offer security and monitoring that an individual cannot accomplish on their own.
Yet in doing so, the exchange’s customers end up giving away the freedom of managing their own assets. With a centralized exchange any number of things can happen, and if it ends up folding altogether, clients lose their funds and get stuck wondering over what they should have done better.
On the other hand, we have decentralized autonomous organizations (DAOs). A DAO can enable their community members to get actively engaged in the governance process, allowing everyone to make proposals for any decision that relates to asset management, investments, technical development, etc.
A major advantage of decentralized autonomous organizations comes from transparency of rules. A DAO’s regulation is set and executed through code, and all participants can see said code, as well as all the transactions that take place on the blockchain. Thanks to this, members do not need to blindly put faith in some third party that governs the network. If a DAO receives money, the way that money is stored and distributed would be written into the DAO’s smart contract, and handled automatically.
Another aspect in which a DAO stands to be safer and more beneficial than a centralized exchange is anonymity and the greater freedom of investment that stems from it. Clients that want to manage their assets on a CEX need to submit their identifications, which makes them vulnerable to cases of identity breaches. With a DAO, members can invest anonymously, which often means they can be more flexible and experimental with their investments.
No one dictates any decisions without a proper proposal overview, and any changes to a project’s liquidity pool or roadmap are voted on by all the community members. This way, the judging power is left in the hands of the token holders. It is a trustless system, where the blockchain itself acts as the management mechanism. As such, participants are not required to put faith in people they’ve never met.
For example, on Idavoll each project space has a “vault” — a tool for members of the community to stake their tokens in exchange for on-chain votes. These on-chain votes are required if users want to participate in the decision-making process.
Vote holders can initiate all kinds of proposals, including trading, crowdfunding, etc. And the results of such proposals can be accepted and treated more seriously, seeing as how all the votes translate into actual tokens. All users have their own stake in matters and they get to decide collectively how those funds get applied. This greatly boosts the chances of the best decisions being made most of the time, while a shared vault ensures the security of funds. And this, in turn, stands to benefit all members of the community.
Follow us on our socials for more regular updates
Website: https://idavoll.network/
Twitter: https://twitter.com/IdavollN
Telegram Community: https://t.me/IdavollN
Telegram Channel: https://t.me/idavollnet
