📖NFT Bazaar Analysis | The Revolution of NFT DAO
From DeFi to NFTs to NFT DAOs, the crypto space witnessed numerous innovations as projects adapt to new demand in the market.
Non-fungible tokens (NFTs) are unique, digital items with blockchain-managed ownership. Examples of NFT use-case includes collectables, game items, digital art, event tickets, domain names, and ownership records for tangible assets. As of Oct, the total NFT market volume reached $134m with close to 5m sales.
The DeFi paradigm helped NFTs to become more liquid and NFTs expand the market of collaterals in DeFi lending. Some of the DeFi-native applications such as staking, yield farming and liquidity mining are also being used in DeFi-NFT ventures. Users can stake their assets to earn rare NFTs or use their NFT as collaterals for loans.
However, the use of NFT goes beyond the realm of collaterals. It has the capability of representing more complex financial products. These products can be insurances, bonds, or options. In insurance, each contract is converted into NFT. These NFTs can be traded on a secondary market. Another DeFi model that has been adopted in the world of NFTs in the issuance of governance tokens. Many platforms and NFT marketplaces have started issuing and distributing their governance tokens. In the DeFi market, the main interest is towards the financial return on investment. In NFT, the community will expect a far deeper reward at the psychological level. With the world becoming full of digital-native objects, NFT is also expected to permanently settle the question of ownership. As the community continues to grow, many tokens have also been taking a shift towards becoming a fully Decentralized Autonomous Organization (DAO).
What is DAO?
A DAO is a “decentralized autonomous organization”. Launched as a smart contract on public blockchain such as Ethereum, a DAO operates according to its programming as compared to being controlled by executives in an organisation. DAOs run without a central authority with all the rules of the organization enforced by its code running on the blockchain. Furthermore, DAOs often manage their own treasury and issue their own tokens. These tokens represent the membership, voting rights, and/or ownership of the DAO. DAOs fill similar roles to traditional organizations you are familiar with like corporations, cooperatives, non-profits, etc.
Examples of NFT-DAO
Branding itself as the world’s first “community-owned NFT marketplace”, Rarible leverages its RARI token to power its community-run platform model by repositioning themselves as a Decentralized Autonomous Organization. As such, Rarible platform participants are given the right to participate in protocol governance. This means that they can propose platform upgrades and amend existing protocols as a community. RARI is the token that backs the implementation of the DAO. RARI is Rarible’s native utility token. It cannot be bought from the platform and can only be earned by participating in platform activities, such as buying and selling artworks and other collectables. This is called “Marketplace Liquidity Mining.” Holding RARI entitles a user to certain rights. Apart from decisions on system updates, RARI holders can also be part of Rarible’s community-based platform moderation. RARI is also used in helping curate the content marketed on the platform. The community can vote on which artwork belongs to its weekly pick, giving them an added boost in the reach that they need.
Having created the world’s first DAO completely run by NFTs without ERC-20 tokens, Mintable, a non-fungible tokens (NFTs) marketplace/platform created in 2018 has timed the new type of DAO to go live with their highly anticipated version 2 of their platform.
The DAO is proposed to run via each voter having their own individual voting NFT called MINT, where each MINT holds the number of votes that each person has. They can trade their MINTs on all NFT marketplaces such as Opensea, Mintable, and Rarible, but in a twist of the yield farming craze — they can also earn MINTs.
Every time any transaction occurs on the Mintable marketplace — the buyer and seller both get votes added to their NFT, or a newly minted NFT if they don’t already have one. This is supposed to put the control in the hands of the users — as Zach Burks the founder of Mintable said “A new DAO like this allows for a type of yield earning and decentralization — where the users who use the platform the most, have the most say in its governance and get the most out of it.”.
The benefits of not having an ERC-20 token for governance are quite large. According to the Mintable article — by using NFTs, governance voters are not considered investors, there is little risk, pump and dumps cannot happen, and voting is controlled by users who are actually involved with the platform. This is a stark difference from what we saw in October where a flash loan was used in order to sway a vote in MakerDAO — something many people have publicly opposed as being malicious for the community.
Mintable’s marketplace and the first type of DAO to use only NFTs goes live at the end of November. Their new marketplace is touted to have some of the most advanced features for trading NFTs, and some of the most basic things we are used to when using web 2.0 ecommerce platforms — but highly absent from other NFT marketplaces.
Flamingo aims to serve the NFT community by acting as a “hive mind” to support the best individuals, projects, and groups building the emerging metaverse.
Flamingo members imagine a world where Flamingo:
· Acquires NFTs and converts them into fractionalized works so that they can be plugged into emerging DeFi platforms, with rights to these works held and managed by a growing number of people in the Ethereum ecosystem;
· Commissions work from prominent NFT artists, artisans, and creators;
· Invests in digital artists through their respective community or social token;
· Curates acquired works to create digital museum and gallery showings for the public in metaverses; and
· Potentially supports investments in core NFT infrastructure and projects.
The design space for NFTs is broad and Flamingo will explore fractionalizing some of the acquired NFTs to enable a greater range of community interaction. For example, if there is a work of art, and the Flamingo Members would like to fractionalize it, they can vote to do so. Flamingo membership will be on a first-come-first-serve basis. Each member will have the opportunity to contribute 60 ether to receive a 1% interest in Flamingo, which entitles a holder to 1% of Flamingo’s voting rights and profits. Membership is limited to a maximum of 9% or 540 ether per member.
All in all, with constant innovation and development taking place, the DeFi space has never been more interesting than it is now. While the idea of DAO has been introduced for some time and has been used by platforms such as Flamingo, Rarible and Memefarm.io, the concept of having a DAO ran by NFTs completely is relatively new and may be unfamiliar to some. However, given the benefits associated with not having an ERC-20 token for platforms such as Mintable’s governance, it is certainly a ground-breaking concept that is worth anticipating in the DeFi space.
About NFT Bazzar：
The brand-new founded NFT Bazaar is one of the most-used aggregators that offering up to hyper-efficient NFT markets to benefit not only NFT token holders, but digital artists, musicians, gamers and all kinds of lovers as well.
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Lastest SolarX Project MakerDAO Forum: https://forum.makerdao.com/t/solarx-mip6-application-uprets-solarx-industrial-real-estate-backed-loans/6718
OST Digital Securities MakerDAO Forum: https://forum.makerdao.com/t/ost-1-mip6-application-by-uprets-real-estate-backed-digital-security/4438