Building and maintaining good governance in decentralised finance (DeFi) protocols is absolutely essential.
There are a range of ways that a DAO can generate participation from invested parties, so let’s explore what governance is, how it functions, why it is necessary, and how DramEx’s vision will empower $DRAM token holders.
What is DAO governance?
When a project declares at the outset that it envisions a future as a DAO, the founders are stating that their aim is to be open and not be controlled by a single entity or group.
This presents a challenge.
Most centralized companies will have hierarchies which define accountability, control, decision making, and governance. This aims to ensure that the decisions being made through the leadership functions align with a centralized vision and strategy (and can be audited and validated). However, if the company is decentralized, how can you verify that the decisions are equitable?
The answer… you provide a mechanism through which the community engages to become the governance engine.
On-chain DAO governance tends to be tokenized, meaning that holders of the token, acquired through trading or a membership model, have voting rights, access and rewards which also helps to market participation to new users and grow the community.
Sounds great, right? But why is it necessary in the world of DeFi?
Why is governance necessary?
Governance is necessary because:
1) If you are decentralized, you need to build a consensus function for decision making and
2) You need a function to reward participation, as the more people that are involved and invested, the less chance there is of a nefarious party creating issues with a single entity attack.
1) If you are decentralized, you need to build a consensus function for decision making and
2) You need a function to reward participation, as the more people that are involved and invested, the less chance there is of a nefarious party creating issues with a single entity attack.
Governance, therefore, acts as both a catalyst and an ongoing driver.
In these two areas, DeFi projects are pushing the boundaries of what a DAO could look like as a project is only ever as good as the collective intelligence that has a stake in the game.
By directly influencing critical product decisions, people feel invested in the use case and role of the project, platform, or protocol and at the same time can passively benefit from yields or increases in token prices, which support the motivations and behaviours of the crypto community.
This, in turn, builds on both their passion for the technology and their interest in increasing their wealth over time.
DramEx’s vision & the $DRAM token
DramEx’s vision is to build a community-governed marketplace for fine whiskey investment, trading, and purchase.
In order to facilitate this, DramEx will issue a token to establish a community focused on driving the vision forward. The token will be called $DRAM.
Token holders will be able to:
- Buy casks and rare bottles represented by NFTs
- Hold, trade, and physically redeem NFTs
- Stake $DRAM and receive a yield in return
- Maintain project voting rights
- Access to exclusive membership clubs, rewards, bounties, live events, airdrops, and much more
We believe that the collective strength of crypto, mapped to the whiskey world's passion and creativity, will create a distinct and loyal community focused on driving the marketplace that the founders envisioned, and the current team is working tirelessly to architect.
Good governance is the bedrock for us to build from.
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So remember what you’ve learned the next time you are heading to your cabinet to pour your guests a dram… the future of whiskey investing isn’t an autocracy with you as the charismatic leader; it is a community-centric system, where the value is driven by the passionate people that contribute...
Then give your guests their options and trust that they choose wisely!