The current market for DAOs is largely fragmented and has numerous opportunities for tapping its potential for both on-chain and off-chain applications.
Maker is one of the more well-known DAOs with a market cap of more than $582 million in 2021. MakerDAO’s MKR coin is among the most prominent governance tokens in the DAO space. Maker has received funding from the likes of Andreessen Horowitz, and is proof that a decentralized organizational structure can work for the lending, borrowing, and saving of digital currency. Aragon is another example of both a DAO and a building block for others to launch their own DAOs. It claims to be the platform for more than 1,500 DAOs to date, with those DAOs storing at least $350 million in combined assets. Aragon has a market cap of more than $157 million as of 2021.
Decentralized autonomous organizations may be expected to improve with time. The supply of DAOs is growing at a breakneck pace, with a 660% increase in active DAOs between 2019 and September 2020. The development of the DeFi market is set to increase demand for DAOs even further as the number of users of the market rises.
To date, the market for DAOs has the following opportunities as areas of co-investment:
The lack of dedicated platforms with all decision-making performed on forums/chats (Reddit and others), Telegram groups and similar channels, as well as through specialized platforms (The LAO, etc.). The development of dedicated, user-tailored and specific service oriented solutions is an untapped market that can be exploited to attract audiences seeking specialized instruments with the benefits of DAOs.
The following and very significant shortcomings can be identified in terms of existing approaches to DAOs:
Despite the shortcomings, the number of DAOs is constantly increasing and this in itself presents a challenge to end users, who have to choose from a variety of services with no objective evaluation criteria, except for express analysis techniques, which are basically initial screening without conclusive results. As such, the conclusions that can be drawn about the current market of DAOs can be summarized as such.
Services like Swift DAO, DAO Maker and others, which solve the problems highlighted are imperfect in their instrumentation both from technical and economic point of view.
Secondly, the principle of fair and open competition should be applied on the market, and, in itself, the birth of new products in this concept is necessary to ensure user satisfaction and market saturation with quality offerings.
Thirdly, services like DAO.vc offer a closed operation cycle for eliminating the major problems and solving the most important ones of the market. However, there are routine tasks facing the DAO/DeFi ecosystem, which include: