This article was produced in partnership with Thomas Herd
The cryptocurrency market has become so popular over the past decade. The average user may think all the kinks in the system have worked themselves out, but there still remains controversy over the utilization of the Decentralized Autonomous Organizations (DAOs) to keep evolving the industry, particularly after The DAO’s breach in 2016.
Tekin Salimi—well-known crypto investor and partner at digital asset firm Polychain Capital—believes the continued use of DAOs to be of the utmost importance to the next evolution of the blockchain industry.
“Gas prices and scalability concerns on Ethereum today are bottlenecks that have led many project founders to consider launching DAOs on other platforms,” said Salimi.
Salimi noted that DAOs can vitally represent the interests of a diverse group of stakeholders the blockchain, while likewise eliminating the need for any centralized governing authority, keeping cryptocurrency as it was meant to be from its genesis: free from the constricting limits of institutions.
New platforms such as Polkadot can host DAOs by helping connect public and private consortium chains, as well as public and permissionless systems all within one cohesive, secure system. With Polkadot, users can swap data across blockchains seamlessly through the use of “parachains,” keeping all the individual information protected underneath Polkadot’s relay chain umbrella.
“Polkadot is a great example of a platform that stands to win DAO market share,” Salimi adds. “Through utilizing Parity’s Substrate framework, a project founder can now launch a DAO chain that is natively interoperable with all other Substrate-based blockchains. This DAO chain can also participate in Polkadot’s parachain auctions to become an elected parachain and effectively piggy-back off Polkadot’s consensus security. The value proposition of a platform like Polkadot is through reducing the surface area of issues that a DAO founder needs to worry about, so the founder can focus fundamentally on building a valuable economic model for the DAO’s tokenholders.”
As the world of cryptocurrency continues to expand and the governance issue grows in tandem, Salimi believes DAOs are the one true answer to keep crypto users’ transactions both safe and far away from the grasp of centralized authorities.
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