07: What, Why, and How To Buy A DAO Crypto Token
The rise of the blockchain and crypto has unlocked opportunities worldwide. The potential of DAOs goes beyond what traditional organizations can achieve. Hence, it's essential to know what goes into the foundation of these DAOs—the DAO crypto tokens. This article discusses what DAO tokens are and how you can buy them.
DAOs in a nutshell.
Decentralized Autonomous Organisations or DAOs are organizations built on a blockchain and governed by smart contracts. All essential and repetitive tasks of a DAO are coded within and executed via these smart contracts, making the entire operation decentralized. The transactions are transparent and there is no requirement for a central authority.
In a significant departure from how organizations currently operate, DAOs are fundamentally democratic. Members vote on critical organizational matters based on their share of DAO tokens. These DAO crypto tokens play a crucial role in a DAO and the larger crypto landscape.
Relevance of DAO tokens.
DAO tokens are cryptocurrencies linked to a DAO project. DAO members receive voting rights based on the share of DAO crypto tokens they hold. These coins allow holders a slice of the DAO's ownership and give them a significant say in the growth of the DAO.
Why you should be bullish on DAO tokens
There are many advantages to holding a DAO token. Let's look at the most significant ones.
DAO coins or tokens represent a member's ownership. In other words, having DAO tokens allow members to claim ownership of the DAO to maintain the protocol.
Each DAO token holder has a say in the decision-making process. This power is directly proportional to the number of tokens a member holds, however, it doesn't give them greater privileges. Token holders can also take collective action to develop the protocol further and steer it in the direction they desire.
Take the example of the Friends With Benefits DAO. Owners of a certain number of the FWB DAO tokens will get voting rights in the DAO, and the token owners can access its community channels such as Discord and even participate in meet-ups.
Holding a token in a DAO is like having equity in an early-stage start-up. If it becomes successful in the future, the equity becomes extremely valuable. DAO members who are also token holders are rewarded with a fixed percentage of the transaction volumes on the exchange, creating a more stable token user base with a long-term investment mentality. All in all, this reward mechanism differentiates these tokens from those launched by other non-DAO projects.
Certain types of DAOs, called investment DAOs, are dedicated to finding promising start-ups and ventures in the web3 world.
Certain DAOs have specific uses for their native tokens. Take Gala games, for example. This DAO raised $GALA tokens which do not allow any ownership, though investors can use them to acquire NFTs or pay for licenses that let them run supporting nodes. Further, the DAO offers the option to create individual game tokens and trade them inside the Gala Games marketplace.
How to buy DAO crypto tokens?
Create a Crypto Wallet
Find a trusted wallet online and set up for yourself or, another simpler way for beginners, is to register an exchange account, such as on Bit.com where you can have one wallet to fit for different types of crypto.
Find a trusted platform.
To buy DAO tokens, you need to find a trusted platform. With Bit.com, you can get started in minutes. There are several options available for buying cryptocurrencies, and you can purchase by making a fiat deposit or using a debit/credit card.
Buy the DAO crypto token.
Take the time to research the best DAOs for investment. Buy the DAO tokens via the spot market on exchanges, such as Bit.com, and you can also sell or swap to other cryptocurrencies afterwards.
DAO tokens allow DAOs to share their project’s equity with its members. They also ensure that the community has a voice and keeps the operations democratic. DAO crypto tokens can encourage more participation in promising projects. As regulations around DAOs get clarified, more and more organizations are likely to evaluate adopting DAOs to automate aspects of their core business.
Even as we visualize a promising future for DAOs, take the time to do your research and only then purchase or on a secure and reputable exchange such as Bit.com.