A true DAO is a project which allows anyone from around the world to add value to development in the form of decentralized human capital. DAOs are truly decentralized and perhaps the best example of a DAO is the bitcoin ecosystem, as no single entity controls Bitcoin’s growth; instead, people from across the world who are interested in Bitcoin join its community of supporters and then push for adoption.
Harmony’s DAO, which is powered by Social Mining, lets anyone who believes in the need for blockchains targeted at enterprise solutions and smart city applications to grow Harmony through decentralized value-add, which can be in the form of exposure (blockchain marketing), technical development, business development, or any other act that helps the project.
DAO AND HARMONY EXPLAINED
A decentralized autonomous organization, or just DAO, is a business or organization whose decisions are controlled by a trustless protocol made electronically by written computer code or through the vote of its members. In essence, what a DAO streamlines the collective actions of a group that shares a collective goal.
As a blockchain-enabled organization, the DAO is completely transparent and anyone can easily see and audit everything that is being done. Members of a DAO are steered by the incentives tied to the network tokens. The complexity of a DAO depends on the number of stakeholders and processes within that organization that will be controlled by the smart contract or protocol.
Harmony is a public blockchain network that is focused on high-throughput and low latency. It is designed to power decentralized economies of the future by deploying several innovative and experimental technologies when applied to a public blockchain. Social Mining gives it the ability to create a DAO where the protocol is enabling community stakeholders to become validators of each other’s work.
Harmony’s blog claims that to fulfill its promise of delivering a network for 10 billion people which has “10x innovations in networking, systems, and innovations,” it needs its people, its community, and has thus launched the Harmony DAO.
Harmony DAO and Social Mining
According to the DAO Maker’s website, Social Mining is the most advanced resource for converting any Tokenized Ecosystem into a Decentralized Autonomous Organization (DAO). The protocol is being used by a few approved IEO projects that passed DAO Maker’s rigorous due diligence review. The website also asserts that Social Mining is a system that allows a project community to thrive as a self-managed organization of individual users.
The Harmony DAO is operating on this proprietary software called Social Mining, which allows stakeholders to validate and value the work done by their peers. The work done by the peers is automatically displayed to all community members, through their individual dashboards, in a news feed. This offers an almost Social Media-like relevant feel to the users of Social Mining.
There will be at least $10,000 worth of Harmony ($ONE) tokens to be distributed in the Social Mining ecosystem every month. Users who put in the best effort to help the platform reach more people, acquire supplemental tech development, and grow its business development will be paid.
As is the case in any DAO, value and grant distribution will be decided by the DAO participants. A user must hold at least $100 worth of $ONE tokens to become a bonafide community member of the platform. Due to legal reasons, there will be KYC needed in the case of the Harmony DAO. The KYC form will depend on a payout that you are about to receive. If you get up to $100 you don’t need to submit any documents apart from your name, address, and email. This will of course change if your payout will be greater than $100.
Using a DAO for Growth
The introduction of Social Mining will enable the Harmony Community to build a distributed rewards system that incentivizes contribution from members to the network. The platform will be run by the Harmony DAO participants and present them with an opportunity to get involved and take the future of the platform into their own hands.
This initiative will ensure that the internal engineers who contribute to the development of the ecosystem by advancing the blockchain protocol or build a top-notch Decentralized Application (DApp) will be rewarded and also the external contribution from developers will allow the project to move forward in different ways without affecting the highest development prioritized by the team.
Any developer can freely work on a new tool, a DApp, or submit a bug, and the community validators will decide whether to upvote or downvote the proposal depending on the value and importance of the development to the ecosystem. All participants in the Harmony DAO collectively decide on payments to projects with real impact that will positively affect or support the Harmony Ecosystem. The launch day of the Harmony DAO was a great success as 209 users subscribed with a staked allocation of at least $20,900 USD worth of $ONE tokens!
Boosting Token Utility
DAO Maker’s documentation explains that Social Mining is designed to instantly 2x the utility of a project’s token. Harmony’s tokens, for example, are meant as fuel for the Harmony Blockchain. Now, however, ONE tokens are also fuel for the Harmony DAO. In the past, the creation of DAOs has been the entire purpose of certain ICOs. Instead, Harmony has launched a DAO as an additional growth mechanism for its token, something that had not been precedented.
Additionally, Social Mining’s creators push that the technology integrates key microeconomic theories to creates a system where opportunity costs of exiting stake in a project are proportionately applied to all the wealth hierarchies involved in a project.
Community members with small holdings have little to gain by putting extreme effort in supporting a project. The value of their work will add considerably more value to large token holders. The DAO disrupts this problem by enabling direct, community-validated payments, straight to the most valuable members, regardless of how much ONE they hold. Simultaneously, it gives considerable power to large holders as they yield a great say in the network’s validation. This is understandable as these individuals or entities have the greatest interest in promoting activities that grow the system; these individuals are given a high cost of walking away from Harmony: loss of power.
To keep things in check, though, Social Mining operates three groupings. While ONE holding is a key metric in system power, so is the amount of value a person has added to a system. Thus, the highly skilled individuals who actively help grow the system also share power. Interestingly, though, the power is kept in check by the mass of remaining holders, as if enough of them vote on a certain decision, by simple upvotes or downvotes, then their collective voice can overturn even the decisions of those with incredible power in the system.
The launch of the Harmony DAO is an interesting development in the blockchain space as it’s a novel creation. Its success can truly prove that decentralization is powerful, effective, and the future.