How Will the DAO Generate Revenue?

Recently there has been a lot of misunderstandings about how the DAO token sale works and how it will generate revenue for the shareholders, more doubts exist about how the DAO works with Slock.it. 

In a previous article, my colleague JP Buntinx explained the concepts and ideas behind the DAO, but it seems that some confusion still exists about how the DAO works with Slock.it UG (the company behind the Ethereum Computer Project and the smart-locks).

DAOs are basically smart contracts (computer programs) living in the blockchain, their behavior and ultimate goals are defined by its creators, the first DAO to be brought to life and released to the public is The DAO.

The DAO will be the link between Slock.it and the investors, in our previous article, we explained that the DAO’s function is to collect money from the investors, issuing Tokens based on the amount sent to the contract (in this case 100 tokens per ETH), the tokens represents the amount of shares a user has in the contract, the DAO will invest this money to generate revenue to its shareholders, all token holders can issue proposals to the DAO, these proposals will then be submitted to vote.

A number of curators have taken the responsibility to come up with a proposal that allows Slock.it to work for The DAO as a service provider, Slock.it will use the money provided by the DAO to design, build and commercialize the first Ethereum Computer, it will be a small electronic device that will run a full Ethereum node, it will also be equipped with the tools to run Ðapps and other programs.

Slock.it summarizes its plans as Blockchain + IoT for a new sharing economy. They will be the main service provider for The DAO, it is expected that, in the future, Slock.it will submit more proposals to The DAO for review, depending on the results and revenues generated by the commercialization of the Ethereum’s Computer, the token holders may decide to continue using Slock.it services.

The DAO can, at any time, stop using a determined service provider and switch to another one, the user will be the ones to decide what they want to do, it is also possible to dissolve the DAO and refund the shareholders. You can review the entire Slock.it proposal here, it contains the details about how Slock.it will work towards the creation of the Ethereum computer and how it will reward The DAO’s token holders.

Decentralized Autonomous Organizations have the potential to become the framework that investors will use to support an idea or business plan, it is in the best interest of all cryptocurrency lovers that DAOs become successful.

If you liked this article follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin and altcoin price analysis and the latest cryptocurrency news.