DAOs: Why are They Important to Web3?
Web3 is in the nascent stages but has seen strong interest from some of the world’s top investors like Sequoia Capital and Andreessen Horowitz. Just look at the funding of Alchemy, which is building an AWS-style platform for Web3. In early February, the startup raised $200 million at a valuation of $10.2 billion, up nearly 2,000% since April 2021. Yet, the company has less than 50 employees. Web3 is a decentralized internet and is built on blockchain and crypto. But there are still many details to work out. For example, there is a need for management systems to handle governance. DAOs (Decentralized Autonomous Organizations) have emerged to do this. In simple terms, a DAO is similar to a true democracy. The members of the organization represent and control it. This is done with smart contracts on blockchains—and the most common is Ethereum.
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