- Many DAOs rely on multisig wallets to manage their funds, allowing a single document to be digitally signed by a group.
- Multisig wallets lock funds in a specific smart contract and all transactions can be verified on the blockchain.
- Multisig uses the Gnosis Safe platform, one of which requires a minimum number of people to approve a transaction before it can take place, almost simultaneously.
Digital assets are here to stay and have made a series of changes in the way in which people and companies conceive money, moving from the traditional physical way, that is, bills and coins, to a digital environment where assets are intangible, and possess a great variety of possibilities.
In addition, crypto assets have generated the development of other systems or programs that help enthusiasts to have better control or improvements in certain aspects of their administration, thus allowing the creation of computer programs that facilitate, secure, enforce and execute registered agreements between two or more parties, commonly known as Smart Contracts.
With the arrival of this type of programs, the figure of the Decentralized Autonomous Organizations or DAOs, which are based on rules encoded in Smart Contracts.
How to keep a good treasury of a DAO?
A question that has arisen among enthusiasts of crypto assets is how to keep a good treasury of a DAO, and in this regard the medium Cryptonomist has addressed the subject in an article.
First of all, it should be clear that DAOs are created to raise funds for a particular purpose which may be charitable or commercial, all within the digital asset environment.
The DAOs are not subject to any regulation, law or centralized body, so they only depend on various mechanisms that ensure their proper functioning, such as the consensus protocol.
For those who are not very aware about it, the consensus protocol is a tool with which it is possible to carry out economic transactions and voting processes through the use of governance tokens, which provide the right to vote and participate in decision-making. community.
It should be noted that DAOs are intended to ensure that everything they do is both fair and approved by everyone involved.
In addition, Given that the DAO is an association that must manage funds, it is important to know how such action is achieved, especially in a decentralized context.
Management of a decentralized treasury
The management of funds in this type of context is something very delicate to handle, especially since we are talking about a scenario in which there are no hierarchies and therefore there are no superior and subordinate positions within the organization since everyone has the same ability to participate.
Also, given that DAOs are basically an organization in its infancy, it is very important to manage the treasury in a unified way, in addition to requiring that it be done carefully, especially when allocating resources.
To respond to this problem, Some DAOs rely on multisig wallets to manage their funds, as this makes it possible for a group to digitally sign a single document.
What these types of wallets do is block the funds in a specific smart contract, allowing all transactions to be verified in the block chain.
With this, transparency is ensured before the members of all transactions, without the need for someone to have the private keys of the wallet.
Notably Multisig uses the Gnosis Safe platform, an open source wallet running on Ethereum, which You don’t need more than a small number of people to be able to approve a transaction before it goes through, almost simultaneously.
A good number of DAOs manage pooled funds with these tools, through the multisig option for managing pooled funds.
Such is its usefulness, that today more than $100 billion dollars have been collected through this system, which is why it is considered by many to be the safest and most reliable way for DAOs to deposit funds. .
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