Wednesday, October 5, 2022

Expert Says Bunny and Qubit’s Switch to DAO “Makes a Lot of Sense”

Cybercrimes and protocol breaches have formed a major trend in recent times, however, the unprecedented hacking of Qubit Finance that resulted in an $80 million loss has proven to have what is at best a hard nut to crack for the Bunny and Qubit’s development teams. While the loss was not in any way envisaged, the team has owned up that it will no longer be able to operate at full scale following the attack, and as a result, it is switching to a DAO governance model.

A DAO is a short form of Decentralized Autonomous Organization, and it forms an extra step in the decentralization provisions of blockchain and cryptocurrency innovations. Just as the name implies, DAOs are a form of organization whose control or decision-making is not vested in the hands of an organization or a group of developers. 

While cryptocurrencies are generally decentralized, in that they are free from oversights from the government, startups operating in the space largely control the activities on their platform. With DAO, these changes, as every member of the protocol’s community holds a viable stake in making decisions that steer the direction of the protocol.

Bunny and Qubit Finance’s DAO Switch, a Thoughtful Step?

Speaking to CryptoMarketsBeat, Brian Pasfield, the Chief Technology Officer (CTO) at Fringe Finance said the switch to a DAO governance model is thoughtful, and that it models the next major trend that is capable of shaping the future of blockchain technology and its associated innovations.

“After Bunny and Qubit suffered an $80 million hack, the Qubit team announced that it would be moving to a DAO structure as it would be impossible for the team to run the protocol at full scale,” he said, adding that “While this move came as something as a surprise to the community, in many ways it makes a lot of sense: hacks like this can be devastating for projects, but in increasing its decentralization, it has a chance of overcoming the incident. This is because it gives the community a chance to reach group consensus and decide on the way the project can move forward.”

Parsfield also pointed out that “many of the leading DeFi projects have already moved to DAO structures, and it’s likely that the trend will continue in the future as teams look to the community to handle governance and key decisions.”

DAOs present a lot of benefits to protocols adopting them in general. Besides cutting off the costs of running a developer-supported ecosystem which is now run by a set of code and the broader community’s discretion, the ecosystem seems to trust the protocols much more as they understand that decisions arrived at is undisputedly that of the majority.

DAOs for Social Causes

Evolution has proven to be the hallmark of the digital currency ecosystem, a trend that Pasfield agrees with. While DAO may be seen to still be evolving in relation to the blockchain ecosystem that is largely still a little above a decade old, a lot of innovators have set up social causes around this technology.

“Besides DeFi, DAOs have evolved in huge ways over recent months. ConstitutionDAO, for example, raised $45 million to buy a copy of the U.S. Constitution. FreeRossDAO bid $6.2 million on an NFT collection by Ross Ulbricht in an effort to set him free,” Pasfield noted, adding that a number of related DAOs have sprung up over the past month with the goal of achieving remarkable social causes.

The credibility in the Bunny and Qubit development team can be felt like their decision to switch to DAO does not imply they will be leaving the protocol entirely. Infact, the plan is that they will remain a part of the DAO and help repay everyone that might have suffered losses in the wake of the hack.

With DAOs coming off to the rescue, a number of experts, including Pasfield believes in succession to Bitcoin (BTC), DeFi, and NFTs which exploded in 2020 and 2021, “DAOs look to be an important trend for the crypto industry in 2022 and beyond.”

Godfrey Benjaminhttps://cryptomarketsbeat.com
I'm just a nerd who wants the world to know about the unique capabilities of blockchain and digital currencies

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

0FansLike
0FollowersFollow
2,043FollowersFollow

Latest Articles

%d bloggers like this: