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NFT and DAO (Day 467)

One of the use case of NFT is that it can be used as a proof of membership. This empowers people who share something in common to form groups easily. NFTs can be used to unlock contents, allow posting contents, and vote.

Essentially, these communities are DAOs. DAO has been a way to create entities that no central control, so no action can be enforced on a particular individual that could dissolve the organization. It has been a way for companies to operate outside of regulations.

But the real power comes when people actually use it for communities. For example, if there's a large enough group pulling financial resources together, they can outbid some wealthy tycoons on auctions (of NFTs?), enable the group to have bargaining power, or that is the basis of forming their own mutual insurance pool, lending pool, etc.

Consider the fractional ownership structure of owning a real estate. Let's say a group of 100 people together owns a real estate. One of the biggest challenge is what if there's a good offer coming in, but not all people want to sell? Even if there is a majority, there is no way to FORCE another person to transfer the NFT token to complete the transaction. So it is important to have a "buy out clause" which enables the ownership to become a whole whenever a majority has reached. Here is a very good blog post about it by niftEx: https://blog.niftex.com/the-buyout-clause-in-depth/

The rise of the NFTs and DAOs have create many interesting possibilities. Looking forward to seeing more innovative formations of communities and use cases coming out by composing all these components.

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