Hello dear friends. Today we will discuss with you a new financial project called GEOMA DAO. To understand why such a project is being created, for a start we need to study all the basic principles of the DAO project. To understand how such a complex system works and how it will bring profit to all participants.
DAO (decentralized autonomous organization) is a complex form of a smart contract in which the rules of a decentralized organization are written in the code of the contract, and management is done through tokens.
As the name suggests, DAO is an organization that works autonomously and decentralized. The idea has been around for quite some time. The Bitcoin network is considered the first truly autonomous corporation whose work is coordinated exclusively through distributed consensus, in which any person can participate.
DAOs work independently; management does not need centralization and a third party. An organization can grow and profit without any centralization.
Both DAO and ordinary companies work similarly: they pursue their business goals. However, companies may change goals and act differently. But in the case of DAO, there are strict rules that are laid down in the project initially, and it is difficult to change them.
There is a good example of DAO visualization from Mike Hearn, a former Bitcoin developer, and evangelist.
Imagine a car without a driver looking for passengers. The car takes a fee for the trip and spends the money at a gas station. He does not need money above spending on fuel and does not require payments to the driver. Such a taxi does not need external assistance to understand how to work, except for the originally laid down program.
This is how the DAO works. They are programmed initially and after that they work autonomously, strictly fulfilling their functions.
Why are GEOMA DAO created?
By their nature, GEOMA DAOs are autonomous entities. This means that after they are deployed, external forces cannot influence the process. Everything that happens on the system is transparent, as it is an open-source solution. GEOMA DAO has GMD transaction tokens, which are rewards for specific actions. The distribution of tokens is carried out in proportion to the contribution of the account to the development of the organization.
The consensus is another important aspect of the GEOMA DAO. It requires that most stakeholders make the same decision. Even mistakes cannot be resolved until most stakeholders agree to this. All management is based on voting, through it, the consensus is reached on all decisions, for example, on financing participant's or developers' salaries.
GEOMA DAO is different from typical organizations. The biggest reason people came up with the DAO is to take advantage of the typical business features without bureaucracy and inefficient distribution. With DAO, time and effort do not go to maintaining intermediaries: the organization itself does all the work. Proposals are accepted through the vote of token holders, salaries to contractors are paid through them, consensus governs decision-making.
DAO violates the traditional management system, which is always centralized. It also solves the problem of the principal-agent when everyone acts in their interests because the DAO uses smart contracts, which are programmed rules. They describe what actions can be carried out in the system, for example, to distribute funds in the case when more than 50% of the voters agree.
Adherents of this form of the organization say that this method can work not only in the case of cryptocurrencies but in general, is a way to introduce democracy through cryptography. Participants receive voting rights to manage the system, and each vote is counted impartially. It can be used in logistics, asset management, real estate, and despite the decentralized structure, the system itself can pay employees and service its expenses.
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