Exploring Governance Models in Decentralized Autonomous Organizations (DAOs)

For many years now, we have seen the massive dominance of the Decentralised Autonomous Organisations which is called the DAOs that helps to create stability most especially in the digital age. Decades ago, we where operating using a centralised authority but that is not it anymore. With DAOs, we now have it been controlled by smart contracts and this has helped to create a system that we have been lacking for many years. What is the system, a system that is built on transparency and security.

For every Decentralised finance platforms that you see out there, it is majorly because of the DAOs because they are responsible for the governance system in the Decentralised finance system. But even with the DAOs been the foundation for the Decentralised finance, the governance model on which they run on is still very important because it can either affect the DAOs negatively or positively.

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Talking about what is the role of governance in DAOs, I will say it is enumeous. We really have a lot of them. In fact, without Governance, DAOs can not be sustained. There are a lot of them. The first is in the aspect of decision making. I will say this is one of the most important one. With governance, it helps to filter out which decisions that should be taken and which one to be rejected. The second importance is also in the aspect of accountability and Scalability. By the right governance model in place, you are so sure that accountability is assured irrespective of that which might happen.

When it comes to DAO governance models, we also need to understand that there are various types of it. The first of it is in the aspect of the token based governance and why this particular type of governance is one of the best type of governance model out there is because it is so easy to understand but most of the time, it face the challenges of low participation. We also have the reputation based governance as the second type of governance models, there is also the quadratic voting. There are many of them but I will like to stop at this three. The three of them have their own advantages and disadvantages attached to each of the governance models.

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Let me briefly talk about the future of DAO governance. Even though there might be some challenges right now, I strongly believe it is just a matter of time before those challenges are settled. Even though the DAO governance is still at the earliest stage, but I am so sure it will definitely surge up because it is the foundation on which Decentralised finance thrives and succeed also. In years to come, we will have more innovations that will come up. Innovations like artificial intelligence will still get much more better and which will help to take the DAO governance to another level.