Educational Post:
What is an investment DAO?
An investment DAO allows its members to decide when and where to invest its funds. This could be in real estate, DeFi investment vehicles, or any other asset the DAO chooses to invest in. An investment DAO uses the Decentralised Autonomous Organisation (DAO) model to democratize and decentralize the whole investment process. Traditional models put investment power in the hands of a relatively small group of money managers of VC funds and family offices, and hedge funds. Alternatively, investment DAOs offer anyone holding its governance token the ability to make decisions regarding its investments. Instead of using the expertise of a narrow group of individuals, this model prioritizes the wisdom of the crowd when making investment decisions.What is a DAO?A Decentralized Autonomous Organization (DAO) is an organization governed by smart contracts, self-executing pieces of code that run on a blockchain. DAO members deliberate and make decisions that are then executed using these smart contracts. A DAO, in effect, can function without human maintenance and run continuously. Even if DAO members lose interest or abandon the project, the DAO's framework will still live on due to its immutable nature.The most common way DAOs make decisions is through voting mechanisms based on governance tokens. The more of the governance token you own, the more voting power you have. Some DAOs allow any member to make a proposal, while others may limit this right to a specific group. DAOs are used commonly to manage DeFi (Decentralised finance ) projects, blockchains, and other protocols in the crypto world.
