All about DAOs, whale contribution to success, and concerns

The impending whale migration will travel through DAO-infested waters that are chilly. What can the industry do to meet the needs of this new generation of cryptocurrency investors?

Web3 has inspired a lot of interest in the industry, as seen by Web3 currencies’ recent market capitalization of around $50 billion.

One of Web3’s most appealing characteristics is its ethos. It is a barrier-free and intermediary-free ecology that welcomes anybody, at any time, from anywhere.

However, there is one fundamental problem: no decentralized finance (DeFi) infrastructure is robust enough to execute these massive orders completely decentralized, as the use of centralized exchanges contradicts the DAO’s decentralized nature.

The DAO

The highly autonomous organization is no longer just a theory; it is becoming a reality.

They’re changing, just like everything else in the blockchain world.

DAOs and their application cases have undergone countless iterations since their inception.

The first DAO, dubbed The DAO, was established in April 2016 as a crowdfunding effort and immediately became one of the most successful in history, raising more than $150 million in Ether (ETH).

Since then, the organizations have evolved in every way, from membership requirements and leadership structures to the ways in which they deliver value to their members.

Contribution of whales

While the promise of Web3 has attracted traders from many walks of life, massive traders, often known as whales, have emerged as one of the most powerful types of crypto traders.

Whales are frequently divided into two categories: large individual dealers and companies.

DAOs are a new form of whale trader that has just arisen.

These completely democratic groups have been undertaking massive order trades to generate passive cash for DAO members.

However, there is one fundamental problem: DeFi’s infrastructure is insufficient to fulfill these massive orders entirely decentralized.

They can trade on centralized exchanges and pay high fees, but this is incompatible with the DAO’s decentralized nature.

Know what whales are doing

Individual investors will enter the market as bitcoin trading becomes more mainstream, and whales will transition from regular traders to DAOs.

Rather than dealing with major traders on their own, they are trying to get hold of DAOs to trade on their behalf via governance vote.

This transition will be challenging, however, because current infrastructures are not adequate for DAOs. In order for DAOs to succeed, Defi systems must start catering to their special needs.

DAOs offer a number of advantages to investors, including the incompatibility of retail cryptocurrency trading with traditional centralized financial institutions.

This mistrust is increased when dealing with large institutions.

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Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing