Daox is proposing an advanced open source technological solution and a unified protocol that aims to fix the major problems related to ICOs and crowdfunding, preserving the benefits of crypto, raising the efficiency of capital and establishing the basis for the future investment industry. This solution is called a Decentralized Autonomous Fundraising Organization or Fundraising DAO protocol.
Right after Daox and DXC token smart contracts are published on the Ethereum blockchain, a completely independentand autonomous ecosystem is formed.
The purpose of the establishment of the ecosystem is to provide the most efficient way of investing and raising funds. The ecosystem consists of the elements that could be grouped into the following 4 categories: users, interfaces, DAOs, and third-party tools and services.
For instance, the Daox Platform and Daox Walletapp,as wellas other tools for interaction with the ecosystem are interfaces that are convenient tools for the interaction with Fundraising DAOs, but cannot affect the Fundraising DAO
protocol itself. Any developer can release his own interface for the Daox Ecosystem and Fundraising DAOs.
How it works?
ICOs and crowdfunding campaigns are easily launched using the Daox Platform or any Ethereum client.Each campaign then forms an Ethereum-based Fundraising DAO featuring its own ERC20 token.Each DAO holds the raised funds and is managed by the transparent voting of its token holders.
Blockchain technology completes a variety of tasks that would either be done with a significant loss of efficiency or would not be able to be implemented at all. Shown below is a list of the main Daox features that could not function without the use of blockchain:
- Use of cryptocurrencies: one of the principal goals for Daox is to simplify the process of attracting and distributing the funds in crowdfunding, when neither borders nor jurisdictions matter. This would be impossible to implement through traditional financialinstitutions.
- Absolute independence: in order to reach the required level of credibility towards the new ecosystem, the complete elimination of an intermediary between investors and project authors is required. This became possible only with the use of blockchain, which in this case serves as an unconditional warranty that the rules described in the source code will be complied with and will not be modified.
- Transparent voting: when it comes to centrally controlled systems, there is always a possibility of administrative interventions. Due to all the services and data of Daox being in a decentralized blockchain
network, the potential influence of administrative resources is eliminated, which means total credibility can be reached for the process of voting.
Safety: all the proceeds raised and stored following the principles of Daox are protected from misuse and unauthorized withdrawal. The finances are securely stored in Ethereum smart contractsand could only be used on project development. Therefore, scams and any other
fraudulent activity are almost completely eliminated.
Value of Tokens: the funds raised via Daox principles are kept at investors’ disposition; the way they are managed further on is determined by voting. Therefore, even upon transferring funds to the project, the investor owns an asset as the digital share of a DAO (a token).
Project team is motivated: when the startup team does not receiveall the funds at once, but rather gets tranchesas work proceeds, the level of motivation rises significantly. This in turn increases the chances of success of the startup. This is one of the reasons why the fundsare being transferred as tranches when it comes to traditional forms of investment,and it is indeed needed to be implemented in crowdfunding and ICOs.