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What is Decentralized Autonomous Organization (DAO)?

A decentralized autonomous organization (DAO) is an organization represented by rules encoded as a computer program that is transparent, controlled by shareholders and not influenced by a central government. NavCoin’s DAO intend to achieve this with three major features:

1. Community Funding System The community funding system aims at creating a decentralized funding system where anyone in the world can submit proposals. The proposals will then be voted on by the network. Once accepted, the requested funds will be locked up for the proposal. Payment requests can then be submitted to release the funds in small portions or all at once. This funding system is unique in many ways:

   1. Decentralized: There is no “dev team” or anyone controlling the funds. The only way to get access to the funds is through network consensus. There is also no limitation to who can vote. Anyone owning NAV and staking has the ability to vote. When a block is staked, the staker will cast the vote. There is no minimum staking amount requirement or masternodes for NavCoin. You stake, you vote.
   2. Two rounds of voting: The network will have to reach consensus for accepting the proposal and paying the proposal, hence called dual-consensus (multi-consensus). There can be multiple payments. In fact, it is encouraged that the proposer schedule out payment requests with milestones when creating the proposal so the community can assess the work done and release the payment accordingly. This system protects both the proposer and the community. It prevents the awkward situation where either the proposer has to complete all his/her work before asking for funding, or, the community has to trust that the proposer will complete the work as promised and pay upfront.
      

2. Consultation System: The consultation system is created to gauge the community sentiment on any topics. The most obvious benefit is that when new features are introduced to NavCoin, the community used to have to vote on soft forks to activate said features. With the consultation system, developers can easily communicate with the community to see if new features will be accepted even before they are worked on. Besides that, there are many other use cases for consultations. Stakers can create polls of which privacy protocol to implement or predictions of how much bitcoin will be worth in 10 years. One can say consultations are providing directions that the community decides as a whole and follow as a whole.

3. Consensus Parameter Changing System: Historically speaking, network consensus parameters are slow to change due to two main reasons. One, it requires deep understanding of the code to ensure nothing breaks. Two, the changes are a yes/no questions. You either support the changes or not. With DAO, any community member can start many consensus changes at the same time with various values. For example, one can propose to change the rewards per block to 1 NAV, 5 NAV, and 10 NAV at the same time and let the community choose. And the entire process can be done without any involvement from developers.

With these systems, NavCoin’s DAO allows the community to be funded for work, guided by community’s own directions , and able to change network parameters without developers’ involvement.

Updated on 12 Mar 2020