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Daostack ICO Review: A comprehensive review and analysis on Daostack ICO, which is set to mould the framework for decentralized governance systems

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Overview

Daostack is creating a framework for the governance of Decentralized Autonomous Organisations (DAOs) on the blockchain. DAOs are basically decentralized entities that operate through smart contracts, where all the rules and regulations of the entities are pre-programmed and self-executed without the need of any intermediaries. Daostack is a plug-and-play solution for smart organizations, providing the basic tools and templates for the creation, management and governance of DAOs.

Daostack is like wordpress for creating DAOs

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Applications

The purpose of Daostack is to create a platform to facilitate easy creation of DAOs, as there is an absence for an appropriate structure to govern a decentralized entity. Here are some of the functionalities that will be offered by Daostack’s ecosystem:

  1. Token Distribution: DAOs can be created for the purpose of issuing and distributing native tokens of any projects to investors, just like those used in many Initial Coin Offerings (ICOs). Funds can also be allocated to based on the rules set by the DAOs, such as whether to store funds in reserve or distributed to third parties in exchange for services.
  2. Asset Management Funds: Decentralized hedge funds, pension funds, venture capital funds can be created using a suite of management and operational tools offered by Daostack
  3. Reputation Scoring System: A reputation mechanism is a major component in DAOs, to allow for a fair decision-making structure in a decentralized system. Daostack has integrated a reputation assignment system where each DAO can assign reputation scores to its members that are non-transferrable. Members earn reputation through positive contributions made to the DAO
  4. Distributed Data Curation: Daostack will allow DAOS to manage, maintain and curate their own collective databases
  5. Customizable Governance: Each DAO can customize and configure its own governance structure. They can add or remove certain elements, define agency functions and specify what it can or cannot do.

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Technology Breakdown

Here s a visual breakdown of Daostack’s technology layers:

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Daostack will be created on top of the Ethereum blockchain, leveraging on InterPlanatary File System (IFPS) as an overlay network for data storage and retrieval. The technological stack is as follows:

  • Arc: Arc is the foundational layer of Daostack, representing a framework of governance for the creation of DAOs. It is a library of smart contracts that can be used to create, customize, deploy and operate decentralized organizations on the Ethereum blockchain.
  • Archives: A public and shared set of registries curated by the community with the aim of enhancing interoperability and collaboration of DAOs within the ecosystem. Daostack aims to start with 3 key registries:

1. Mosaic: Registry encapsulating all DAOs and agencies that are curated by the community

2. Compendium: Registry encapsulating all governance models for DAOs

3. The Hive: Shared registry of offers and requests

  • Arc.js: A Javascript library used to operate the Arc layer, designed to simplify the DAO creation process. Since Javascript is the most widely-used computing language, the vast amount of developers that aren’t familiar with Solidity – Ethereum’s native computing language – would be able to create DAOs and decentralised applications (dApps) with relative ease.
  • Alchemy: The browser dApp created by Daostack to enable interoperability between any other DAO and applications in the ecosystem.
  • DApps: Decentralised applications built atop Daostack

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Unique Differentiator

  • Infrastructure for DAO/dApp Development: The current requirements for creating dApps and DAOs on the Ethereum blockchain requires a prerequisite understanding of  Solidity, which is Ethereum’s native programming language. The illiteracy of many developers in Solidity (due to the infancy of Blockchain technology) makes Daostack’s solution a very valuable service for the many developers keen to enter the industry and create decentralised applications using Javascript, which is the most-used programming language.
  • Customizable Modules: Through its registries, developers can mix-and-match various governance models for their DAO to see which fits their organization. This functionality would be extremely handy to reduce the complexities and barriers to entry for developers.

Token Utility & Economics

Token Distribution

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Daostack ICO, Daostack, analysis on daostack, daostack ICO analysis, daostack ICO review

Token Utility

Daostack employs a dual-currency system to ensure the fair functioning of the ecosystem, separating ownership of the native tokens from the reputation mechanism of members. The currencies are:

  1. GEN Tokens: Daostack’s native tokens are fully transferable and are needed to access the ecosystem. The basic function for GEN includes voting for proposals across DAOs in the hopes of driving collective attention towards it. The process of voting requires members to stake their GEN tokens. If passed, those who staked on the proposals would be rewarded with more GEN.
  2. Reputation Score: Reputation is a non-transferable currency that can only be gained by performing actions that benefit the DAO. Members with a higher level of reputation will be rewarded with more voting powers. This ensures a just and equitable incentive mechanism to advance benefits to the greater collective ecosystem.

The separation of token ownership and voting power is a well-thought-out mechanism to ensure a fair governance model to incentivize development and adoption of Daostack’s ecosystem.

(See more: Coins, Tokens & Altcoins: What’s the Difference?)

Team

Key Management

 

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Daostack’s CEO – Matan Field –  is a physicist and a renowned expert in blockchain technology. He is the chief architect of Daostack’s infrastructure. The CTO is Adam Levi, also a physicist and a highly experienced programmer. Both the CEO and CTO possess deep, technical expertise in blockchain development and programming, and are also PHD holders in physics.

In terms of the overall team, Daostack boasts graduates from Harvard, engineers from Microsoft and various roles in blockchain development and programming.

Advisors

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Daostack boasts a strong line of advisers, including the CEO of eToro (Yoni Assia) and Gnosis (Martin Koppelmann.

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Roadmap

Here is Daostack’s Roadmap:

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Daostack ICO, Daostack, analysis on daostack, daostack ICO analysis, daostack ICO review

Traction

Alpha Release

Daostack has released an alpha – called Alchemy – on the Ethereum testnet (Kovan). It is scheduled for the mainnet very soon. The demo of Alchemy can be found here.

Code Development

Daostack is an open source project and its development can be monitored through its Github repository here. Looking at the project’s progress, they are extremely active in code development and updates. Their Arc repository – which is the base layer for Daostack – features over 1,111 commits and 19 contributors. The development of the source codes seemed to be initiated in April 2017. The active progress and speed of Daostack’s source code development represent a positive indicator of its professionalism.

Partnerships

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Daostack has forged early-stage partnerships with other projects such as Gnosis and Sapien network.

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Strengths

  • Highly Capable Team: Both the CEO and CTO possess rich experience on the technical side of blockchain development, with impressive academic credentials. Additionally, Daostack boasts a strong line of advisers, including the CEO of eToro.
  • Active Code Development: Daostack’s repository is active, with regular commits by the developers. Looking at their Github, Daostack seems to be developing at a quick pace, a testament to the strong expertise and vision of the project.
  • Lucrative Market: With the solution of easing dApp/DAO development and creation, DAOstack is well-positioned to take advantage of the exponential growth and traction of development within the blockchain industry. Daostack could facilitate more influx of developers – that aren’t familiar with Solidity – to create applications on its platform.
  • Effective Token Structure: The separation of value ownership (native tokens) with voting power seems like a well thought out plan to enhance fairness in the system and align incentives of members. Additionally, the staking mechanism for GEN tokens – as a utility – would increase the value of the tokens with greater adoption (due to a greater number of proposals).

(Read more: Analyzing Cryptocurrency Risk: Existing Coins vs ICO)

Weaknesses

  • Strong Competition: There’s already been an established player, Aragon, that tries to do the exact same thing. Aragon is first to the market, with its core Alpha being released back in March 2017, and a newly updated alpha release (with 3 source code refactoring) in January 2018. Daostack needs a lot of catching up to do to compete with the likes of Aragon and CONE network
  • Untested Markets: Due to the extreme infancy of blockchain technology, and even more so decentralized organisations, it is hard to tell if there is a viable market for DAOs.

(See more: Understanding Cryptocurrencies: Game of Thrones Edition)

Summary

The importance of governance mechanisms in decentralized entities cannot be overstated, and Daostack is well-positioned to solve a potentially real need in this infant technology. Daostack’s team possess the experience and skills needed to pull this off, and their progress have been great since the get-go. Perhaps the endless use-cases for DAO development are the biggest potential for Daostack in the long-term.

Verdict: Good Long-Term Hold

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Beneficial Resources To Get You Started

If you’re starting your journey into the complex world of cryptocurrencies, here’s a list of useful resources and guides that will get you on your way:

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Trading & Exchange

Wallets

Read also: Guide on Privacy Coins: Comparison of Anonymous Cryptocurrencies and How Exchanges are Manipulating the Cryptocurrency Market


This represents the writer’s personal opinions and does not – in any way- constitute a recommendation of an investment or financial advice. Please assume caution when investing in cryptocurrencies and do so at your own risk, as it is extremely volatile and you can lose your money.


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