New blockchain and crypto concepts have been responsible for introducing many improvements in the overall blockchain landscape. In recent times, the growth of Metaverse DAO has caught everyone’s attention. The platform launched in February 2022 and brings two of the most important terms in the blockchain technology space right now, i.e., DAO and the metaverse. To the surprise of everyone, the crypto-asset industry registered unreal levels of success in the last year.

The effect of crypto on the world in recent times has proved its capability for introducing disruptions in any sector through virtual channels. Traditional finance has been one of the foremost sectors with a noticeable influence on crypto applications. So, how metaverse DAO works in revolutionizing the applications of crypto in traditional finance? Does it have any relation to the metaverse? Let us find the answers in the following post. 

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What are DAOs?

Before taking a note of answers to “What is DAO in metaverse?” you must know the background for the same. Everyone in the tech sphere cannot hold back their excitement regarding the potential metaverse under development. However, realizing the true vision of the metaverse revolves around ensuring decentralized governance. Decentralized Autonomous Organizations or DAOs serve the exact same purpose for the crypto world. They can offer precise governance mechanisms for crypto platforms to ensure effective product management alongside reducing human error. 

Most important of all, DAOs can remove the concerns pertaining to manipulation of investor funds. Basically, DAOs ensure that the decision-making privileges for a specific blockchain platform do not rest in the authority of a single individual or a group. If DAOs are so beneficial, what value can they bring to the metaverse? You can find the answer by reflecting on the fundamentals of how DAOs work.

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Working of DAOs

The basics of Decentralized Autonomous Organizations are a mandatory highlight in any account of Metaverse DAO explained clearly. You can develop a solid foundation for understanding how the platform works by reflecting on an overview of the working of DAOs. As of today, almost 188 DAOs supervise the management of $13 billion worth of assets. They serve an important role in deciding policies for DeFi protocols, setting parameters for virtual land auctions, and defining yield rates. 

The working of DAOs is an essential highlight for understanding “how metaverse DAO works” in detail. Interestingly, computational algorithms serve as the foundation of a Decentralized Autonomous Organization or DAO. The algorithms, or smart contracts, define the rules for participation and cooperation among different parties associated with the DAO. Despite varying levels of complexity in the smart contracts underlying DAOs, the rules would always be immutable and transparent. As a result, everyone in the DAO could review its operations alongside verifying the proper enforcement of rules. 

All the decisions in DAOs stay under governance of proposals and voting mechanisms for ensuring that everyone in the organization expresses their opinions in the governance process. The process is quite crucial for supporting participants in voting on crucial decisions for management of DAO resources. 

As a matter of fact, the importance of Metaverse DAO becomes quite evident with an overview of how DAOs work. A DAO for the metaverse could foster a sense of community building among the participants with a focus on one common goal. How does the newly launched Metaverse DAO project fit in this narrative?

Want to know how Metaverse is the next big thing? Check this: Is Metaverse The Next Big Thing?

What is the Metaverse DAO?

You must have heard a lot about the metaverse in recent times. The promise for an open and decentralized world with persistent and shared digital spaces is appealing for various reasons. The metaverse spells the next stage of digital transformation by mirroring the real world in virtual spaces and vice-versa. 

However, the explosive growth of attention around metaverse and the crypto space, particularly with the use of DeFi, NFTs, and play-to-earn games, creates a jumbled environment. What about the governance for the metaverse, which would include all these solutions in one place? The answer for “What is DAO in metaverse?” can find more clarity with an introduction into probably the first-of-its-kind DAO for the metaverse. 

Metaverse DAO is an innovative Farm-as-a-Service project based on the Ethereum blockchain network, tailored for helping users earn passive rewards from yield farming across different blockchain-based networks. The project basically aims at offering easier opportunities for earning farming rewards without investing their own efforts. 

It focuses on improving profits exclusively for the native $MDAO token holders. The Treasury Wallet provides funds for farming across different networks according to DAO governance rules. Subsequently, all the rewards go automatically to the dividends pool, from where investors can claim their rewards in the form of $MDAO or ETH

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How Does Metaverse DAO Matter for the Metaverse?

The next crucial highlight in any account of metaverse DAO explained in detail would obviously focus on its significance for the metaverse. What value does it bring for the metaverse? If you have assumed that it is just another crypto farming platform, then you might have it wrong. Metaverse DAO actually focuses on the development of a community-run metaverse. The initiative of the DAO platform for creating a community-run metaverse includes allocation of treasury funds through different metaverse projects. 

The MDAO governance proposes investments in development of play-to-earn games, NFT-based games, and immersive metaverse experiences. Furthermore, the platform also aims at driving direct investments in teams and corporations working on a long-term vision for developing play-to-earn and metaverse games. How can MDAO provide such flexible avenues for investment in the metaverse? Doesn’t it seem like blindly allocating the funds of investors to an idea that is still under development? An overview of how Metaverse DAO works could help you find the answers to these questions. 

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Working of Metaverse DAO

One of the foremost highlights in the definition of Metaverse DAO focuses on ‘community,’ which reflects in the MDAO governance. As you must have understood by now, MDAO is basically a Decentralized Autonomous Organization, thereby implying the decentralized nature of its governance. MDAO has envisioned its development as a community-driven protocol under the control of community members, i.e., MDAO holders. 

As a matter of fact, community members or MDAO token holders play an important role in how Metaverse DAO works. Community members have complete privileges over guiding the direction of proposals for the future of the project. The MDAO project primarily focuses on creating a space that recognizes and leverages the initiatives recommended by community members. 

The primary highlight in the working of Metaverse DAO explained clearly refers to the MDAO token. Every MDAO token represents an equal share of DAO governance. If you have more MDAO tokens, you have more power for defining administrative decisions and new investing guidelines. MDAO governance serves as a crucial highlight in its significance for the metaverse ecosystem. You must also notice that snapshot is the sole platform for making proposals and decisions. $MDAO serves as the voting token. The community can bring new proposals to vote or vote for the proposals introduced by the MDAO team. 

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  • Farm-as-a-Service

The striking highlight of Metaverse DAO as a decentralized governance platform for creating community-run metaverse experiences also points towards Farm-as-a-Service capabilities. People who are familiar with the crypto space must have come across the mention of yield farming. The concept of yield farming is almost the same as the one followed in savings accounts of traditional banks. Liquidity providers receive incentives for staking or locking up their assets in a smart contract-based liquidity pool. The incentives in the form of crypto are basically the reward for the trust you invest in the platform. 

Crypto users can gain incentives from yield farming activities by staking or locking their capital for an extended period of time. The interest on the staked or locked assets builds up gradually over the course of time. At the same time, yield farmers can also earn many other rewards for their time and efforts in the project. Even if yield farming seems easy on paper, a crypto investor encounters many complexities and high maintenance requirements. You don’t have to worry as another aspect of ‘how Metaverse DAO works’ provides a viable solution to such problems.

Farm-as-a-Service serves as one of the crucial highlights of Metaverse DAO as it helps in farming numerous protocols. The community can vote on the choice of strategies for farming alongside automatic rewards of farming returns. For example, the protocol automatically imposes a tax in the process of converting any token to $MDAO. Therefore, the native MDAO token holders can find a suitable platform for passive income, thereby opening the roads for many future investments. 

Want to know how liquidity provider tokens work?  Check: How Liquidity Provider Tokens Work

Role of MDAO Governance in Farm-as-a-Service Functionalities

MDAO provides a plausible explanation for “What is DAO in metaverse?” with its exceptional functionalities. The working of MDAO shows how it can empower decentralized governance for the metaverse. Furthermore, it can also reduce the barriers for entry to metaverse creators. However, the growth of MDAO relies largely on the Farm-as-a-Service functionality, which draws investors to the project. MDAO Governance helps in dictating the maximum and minimum yield rates for the existing pools to determine decisions on continuing stakes or re-investing from other pool allocations. 

In addition, MDAO governance also determines the share of funds from the treasury, which can be allocated to different risk groups. Therefore, MDAO governance actually turns out as the core theme in how Metaverse DAO works and delivers efficiency. Here is an overview of how the MDAO governance dictates stacking methods for different risk groups. 

  • Low Risk

The low-risk entries in MDAO refer to stablecoin users and the users of secure DeFi platforms. In the cases of low-risk groups, the volatility rests at around less than 5%, with an APY of almost 30%.

  • Mid Risk

The mid-risk groups, according to MDAO governance, include entities offering liquidity to popular metaverse and blockchain projects. Mid-risk investors hold their investments for at least 30 days, thereby maximizing the returns. The volatility in the mid-risk groups ranges between 5% and 40%, while the APY can go up to 1000% to 5000%. 

  • High Risk 

The high-risk group in Metaverse DAO primarily includes the highest risk platforms. Interestingly, you would find the highest volatility and probably, the possibility for highest yield. 

Metaverse DAO wants to leverage transparent administration for enhancing community-based governance in the metaverse alongside enhancing rewards for the community members. 

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Bottom Line

The overview of Metaverse DAO explained clearly in this post showed how it can serve as a vital tool for the metaverse. It is a community-run Farm-as-a-Service protocol geared up for allocating investments across different metaverse projects. As a Decentralized Autonomous Organization, Metaverse DAO has all the necessary ingredients for empowering community members to take control of the metaverse. 

At the same time, it also empowers the community members with a unique farming protocol that does not feature complexities of traditional yield farming strategies. Furthermore, the clear allocation of stacking methods and relevant rules also facilitates an overview of its efficient, transparent administration. Explore more to learn more about the MDAO platform in detail.

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*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. 101 Blockchains shall not be responsible for any loss sustained by any person who relies on this article. Do your own research!