DAO stands for "Decentralized Autonomous Organization". The AllianceBlock DAO is the decision-making tool for NXRA holders in the AllianceBlock ecosystem. Through Votes in the DAO, the community can let it’s voice be heard and steer AllianceBlock towards a bright future. It can propose new ideas for product & business development, issue grants that promote ecosystem growth, from the DAO Community Fund, and in the future it’ll also assume control over the smart contracts within our solutions.
These actions are taken via the use of specific format proposals in the AllianceBlock governance platforms, Commonwealth & Snapshot.
These proposals, their votes and final results are all stored in IPFS via Snapshot, a gas-less voting client. Approved proposes are executed on the Ethereum blockchain by a committee by means of a multi-sig wallet. The Committee members will be voted in by the community, although for the first 12 months, the most turbulent and vulnerable time for the DAO, its members are selected by the AllianceBlock Foundation to ensure continued efficiency and sustainability.
The remainder of this document explains in greater detail what the DAO is, how it works, and what it can be used for.
For a detailed tutorial on how to use the AllianceBlock DAO, visit the DAO User Guide.
DAOs, or decentralized autonomous organizations, are part of a new approach to organizational management and decision making made possible by blockchain.
Blockchains such as Ethereum extended what’s possible with blockchain technology by adding the ability to decentralize the handling of data more complex than just records of token ownership. Ethereum did this by allowing people to put smart contracts on a blockchain.
A smart contract is a computer program that is run on a blockchain, usually Ethereum. It can store both functions (bits of code that do things) and data (information). Smart contracts are often compared to vending machines. If you put in specific inputs, you get specific outputs. If I walk up to a vending machine, insert $1, and press the “orange soda” button, then I’ll get an orange soda if there’s any left in the machine. If there’s no more orange sodas, I’ll get my dollar back.
Smart contracts work the same way, people can interact with them by sending information with the expectation of receiving specific results or information. Just like the vending machine doesn’t have a little person inside handing out sodas, smart contracts are automatic (dare we say, autonomous).
If you’d like to learn more about Ethereum smart contracts, the Ethereum documentation is the best place to dive in.
The second important quality of smart contracts is their ability to own other smart contracts.
That’s right, every smart contract has its own address (just like the address of your Ethereum wallet) that allows it to own other smart contracts and cryptocurrencies.
So, in slightly more technical terms, a DAO is one or more smart contracts that can perform specific, pre-defined tasks and maintain ownership of cryptocurrencies. DAOs are built in such a way that they will only perform their tasks under specific conditions, such as the passing of a proposal voted on by a group of people who own a certain token (like NXRA). All of this is done on a blockchain. Hence the name, “decentralized autonomous organization”.
AllianceBlock’s DAO also owns a sum of NXRA and other tokens along with its smart contracts. This DAO Fund has been set aside to help sponsor community grants and to help grow the AllianceBlock ecosystem according to the decisions and directions voted on by the community.
Transferring any of the DAO Fund’s holdings or modifying any of the smart contracts the DAO controls can only be done with the approval of NXRA holders.