Top 4 DAOs That Could Steal the Show in 2023: An Overview

Here are four top 4 DAOs that investors should keep an eye on.

Decentralized Autonomous Organizations (DAOs) are considered revolutionary technology. Here are some DAOs to look out for in 2023. They are designed to give out the management, decision making and entity ownership to its members. The governance members of this organization customarily share a common goal that is in the entity’s best interest.

Benefits of DAOs and How They Work

Recently, DAOs are becoming increasingly popular due to their basic structure. They induce efficiency in the organization’s decision-making and, employ an upside-down approach toward management.

Having no central body, DAOs typically distribute the power across its members. These people usually hold certain tokens on a certain blockchain network. All the internal activities and voting procedures for a cause are regularly posed on the blockchain network, thereby increasing transparency.

Following are the 5 major DAOs to look out for in 2023.

AAVE – The Decentralized Lending Protocol

Aave (AAVE) allows interaction between lenders and borrowers, removing a centralized arbitrator. Its immense popularity could be because of the protocol’s integration with multiple blockchains after initial hosting with Ethereum. Governance allows holders to have a tangible say in the matters of treasury funds and potential upgrades.

Moreover, using AAVE tokens as collateral in their ecosystem greatly reduces fees. Total Value Locked (TVL) at AAVE is currently $5.6 billion, distributed across various chains.

MakerDAO – a Peer-to-Peer Protocol

Built on Ethereum, MakerDAO allows smart contracts to control lending and borrowing using cryptos. Due to high volatility, a stablecoin Dai is used instead. A borrower has to deposit certain Ethereum into Maker smart contract, called Collateralised Debt Position (CPD).

Its Multi-Collateral DAI System is believed to be the reason behind its popularity. Created to unlock Defi possibilities and provide users and developers with an innovative financial tool. The total Value Locked (TVL) on the protocol is $7.64 billion.

Curve DAO (CRV) – Automated market maker

A Defi protocol runs in Ethereum, designed for easy swap between similar ERC-20 tokens. These include stablecoins like USDC and DAI, along with Ethereum-based Bitcoin tokens like wBTC and rebBTC. Their sole focus on stablecoins makes them unique from the other DAOs.

Per Curve.fi, more than 70 liquidity pools are available for users to deposit idle holding for yield generation. Supply and demand generally control these yields, but certain pools offer APYs of more than 30%.

Uniswap – The decentralized exchange (DEX)

This DEX allows seamless swapping of ERC-20 tokens to its investors without any arbitrator. They facilitate liquidity pools instead of the order book format traditional exchanges use to meet orders. By placing idle ERC-20 tokens in Uniswap liquidity pools, anyone can generate yields, incentivizing holders to create liquidity in the system.

However, the returns largely depend on the token staked in the pools, but they are still higher than the traditional savings accounts. The total Value Locked (TVL) at the protocol is $3.79 billion, scattered over different chains.