The potential for decentralized networks to tap developer and entrepreneurial talent is untapped, especially in regions where funding can be difficult. The tokenization of services and dapps on-chain, in addition to breaking down the barriers that prevent new ventures from being bootstrapped and providing projects with access to crucial resources, can help encourage decentralized governance models that redistribute control and power to the whole.
The idea of decentralized autonomous organization (DAOs), as well as decentralized crowdfunding, has been reborn to create a new wave open-facing dapps. These dapps are managed by native governance systems, and token-holding groups. Blockchain technology can help democratize the access to the digital economy.
The DAOs rely on a basic structure that allows members to propose ideas and then vote democratically. These DAOs are often used to fund charity, investments, governance, or fundraising. MKR stakeholder are responsible for MakerDAO. There is an off-chain forum for general feedback and on-chain governance. It’s used prior to on-chain voting for evaluating the general sentiment concerning issues affecting MakerDAO ecosystem, and determining a consensus in regards to their resolution.
The DAO operates as an open-source, transparent organization with no managers or board. Every member of the DAO’s community reviews, records and manages the task, proposal, and update using the blockchain. DAOs are architecturally distributed (unrelated parties have different nodes), and may even be geographically dispersed. However, the protocol rules can make them logically central.
What’s more, DAOs and conventional token-based governance systems typically control services on blockchains that are basically ledgers. They can’t extend their control to dapps designed to be entirely on-chain.
Tokenized governance to support consumer-facing apps
The advancements in decentralized governance have made it possible to give developers around the globe a way of bootstrapping and launching a open-source, web-based app that places control in the hands community stakeholders. However, everyone who feels passionate about supporting a particular project is welcome to do so.
This principle is central to the Internet Computer, launched by the DFINITY Foundation — a public blockchain that promises a safe and unlimited environment for smart contracts to run on-chain dapps over the web. Internet Computer allows developers to create virtually any type of online application while decreasing transaction and computing costs. A key feature is the open governance system that controls the Internet Computer — the Network Nervous System (NNS). By staking the blockchain’s native utility token, ICP, into “neurons,” anyone can participate in governance by voting and proposing changes.
The NNS’s accessible model of tokenized governance will soon extend to dapps on the Internet Computer: the ICP community is actively discussing the development of a dapp-based open governance system — the Service Nervous System (SNS). This will enable developers to tokenize their apps and allow the community to control how it works. All proceeds would be kept by the SNS and no central recipients could take them.
OpenChat is a messaging app, DSCVR is a social aggregator, and Distrikt, a professional social network, are all examples of projects which will be subject to community control. Anybody could decide to make their app autonomous by tokenizing its governance. This will allow developers to build on-chain communities and provide liquidity and other resources for the users.
The key advantages
Developers, investors, and users have many options when it comes to open tokenized governance. Developers and entrepreneurs will benefit greatly from the establishment of an open tokenized application. This allows them to communicate with their users and provide regular updates. It can be considered an investment over the long term and a source of ongoing rewards for early adopters. For the entire community, this creates an open tokenized dapp that allows everyone to freely take part in decision making.
The future for blockchain-based organisations is decentralized governance. This can give them more control and allow their members to have a say. The community will direct the development of open tokenized dapps. Decisions can be reviewed by everyone, which encourages all stakeholders to succeed.