How are DAOs important to the NFT platforms?

NFTs have evolved significantly since their inception. More than 1 million crypto users have bought or sold NFTs as of May 2022, and the global NFT market is estimated to grow from $3 billion in 2022 to $13.6 billion in 2027. Alongside the widespread use of NFT -s, other blockchain technologies namely Decentralized Autonomous Organizations (DAOs) are gaining popularity in the digital domain by contributing to NFT platforms.

DAOs and NFTs

DAOs replace traditional corporate structures with decentralized structures owned by the community. Although still in the early stages, they are increasingly prominent and will eventually add value to NFT platforms in many ways and further the Web3 vision of returning network value to users.

DAOs are blockchain-powered, digitally native, community-led organizations where members vote on the entity’s direction and vision. For crypto-curious and natives alike, a DAO’s utility is its ability to facilitate Web3’s goal of democratizing the creative economy through more immediate and open connections between networks and specific projects. They trade traditional institutions for governance models that are more adaptable and configurable than the rights granted to the shareholders of a huge organization.

In addition, authority and ownership are seen as more democratic, comparable to a cooperative organization. Each owner in a DAO is given voting rights via a “governance” token with a fully transparent foundation code, meaning no one is responsible for the community and decisions are therefore made faster and more efficiently. The creators of an NFT and community members can jointly decide the future development of an NFT project and influence the company’s direction by casting their vote in a secure and transparent way.

What potential benefits do DAO-enabled NFT platforms offer users?

Owner benefits

It acts as an instrument for making decisions on an NFT platform. While there are many types of NFT platforms, multiplayer game-based platforms continue to grow in popularity. This is how DAO participation increases the utility of an NFT gaming platform for its users.

• With DAOs, users have the ability to evaluate content moderation, asset management, and auction policies.
• It incorporates smart contracts and digital assets (NFTs) to offer independence, thereby removing the notion of a CEO and control on any NFT platform.
• Users have the option to stake their NFT and native tokens in the dApp to earn rewards.
• Even when their NFTs have been staked or contributed to the liquidity pool, users retain full control over them.

Voting rights

The governance model and management laws distinguish these platforms from standard platforms, which share similar functions.

DAO-enabled NFT platforms rely on members’ votes to grant grants and modify the platform’s existing laws and regulations. It enables all users to participate in decision-making processes and determine potential community policies through transparent and decentralized decisions.

Profit and reward

Enthusiasm for gaming-based NFT platforms continues to grow as these platforms are innovative and offer a variety of revenue opportunities to users. The DAO enables users of the NFT platform to propose opportunities, such as NFT staking. NFT staking enables NFT holders to generate passive income by enabling them to access their NFTs and stake them in liquidity pools without transferring ownership of the NFTs (selling them). Over time, we will discover increasingly creative methods of monetizing assets. NFT betting platforms are mainstream and already enable NFT holders to profit from their monetization techniques.

NFT matches

Using a decentralized application, the NFT platform provides the “NFT Battles” feature to its users. NFT holders stake their assets against rivals (other NFT holders). Others can stake NFT tokens to support their preferred NFT and earn rewards in NFT tokens and digital assets.

NFT Yield Farming

Users who hold both NFTs and the platform’s native token can participate in yield farming. To achieve this, they must propose their suitable assets and directly stake them in the platform’s liquidity pools to provide liquidity to the platform and generate rewards. The rewards consist of tokens and a limited number of NFTs. However, not all users who stake their NFTs are entitled to be rewarded with uncommon NFTs; users must first determine eligibility before staking their NFTs.

Conclusion

DAOs are supposedly the future of employment. As both a concept and a technology, it has the potential to completely change the foundation of an existing business by promoting member-owned communities and eliminating centralized management. Recognizing the power and central prediction of industry experts, companies have often adapted their infrastructure to match it. It can support an NFT marketplace, a crypto trading platform, and even a metaverse attempt.

As DAOs and NFTs emerge, we are beginning to observe how they leverage a collaborative organizational structure model and provide new opportunities for participation for those contributing to NFT platforms. Furthermore, with NFTs giving people ownership and tangible benefits and offering new entry points, asset and community compatibility will continue to drive innovation.