Ever since Web3 technology began humbly during the middle part of the 2000s, no one expected such a wide array of technologies could be integrated into a huge ecosystem. The unexpected opinion is proving itself wrong by witnessing a huge growth in the last
decade or so, although full-scale integration is yet to be reached. Blockchains are one of the major facets of Web3, which have emerged as a hub for multiple applications, including cryptocurrencies, non-fungible tokens (NFTs), decentralized finance (DeFi),
and related applications.
Non-fungible tokens, in particular, have attracted a lot of attention recently, and we even witnessed a huge boom in their sales. By definition, these are digital tokens that serve as proof of ownership and authenticity for assets. Marketplaces, games, and
launchpads are the main NFT-based applications, with marketplaces being the most valued. In recent times, hard-core decentralization has been the goal for the crypto world, and a few NFT marketplaces have already adopted such protocols. This blog explains
how NFT marketplaces can be positively affected by community-based decentralization protocols.
NFT Marketplace Platform – A Small Introduction
An NFT marketplace is a platform where people can buy, sell, and trade NFT-based items. These marketplaces can sell generic or niche-based NFT items. Common niches on which NFT marketplaces are based include art, music, video, game, fantasy sports, photography,
and pixelated punks. While all NFT marketplaces accept crypto payment options such as cryptocurrencies and stable coins, some accept fiat payments as an attempt to widen their customer base.
Decentralized Autonomous Organization (DAO) – A Brief Introduction
A decentralized autonomous organization (DAO) is a protocol typically based on a crypto platform. The protocol has an extensive list of powers that makes giving power back to the user possible. The community here is governed by a set of computer programs
with set conditions, instead of one person or a group of individuals. There are various DAOs actively existing in the current blockchain world, concentrating on multiple aspects such as governance, talent acquisition, media, social networking, investment operations,
ownership, and more. These DAOs intend to put a full stop to the organizational hierarchy common today, which has extended to the crypto world. Hence, decisions, big or small, are taken by the whole community rather than a set of individuals who never really
understand the community’s pulse.
How Does a DAO-enabled NFT Marketplace Benefit Users?
In the case of an NFT marketplace platform, a DAO works as a protocol that takes calls on every decision. We can see in the below points more about the benefits offered by a DAO on an NFT marketplace.
- Users can now review the platform’s policies on listing new kinds of NFT products, auctions, and more.
- Smart contracts and listed NFTs are owned by the DAO, which ends the traditional autonomy, hence abolishing human leadership positions from the NFT marketplace platform.
- With the DAO making decisions, it is even possible for users to stake their NFTs on the platform to earn rewards.
- Due to the uncontrolled nature of DAO, a user can still have control over the NFTs or native tokens they had staked on the NFT marketplace.
- Users can also take part in major governance decisions such as auctions, listing, marketplace changes, changes in contract conditions, and so on.
- Other decisions that can be made through a voting referendum include token distribution and burning mechanism, NFT marketplace transaction fees, changing members of the security council, and changing policies of the platform.
The Power of a User’s Votes in the Platform
In a DAO-enabled NFT marketplace platform, voting on governance decisions is seen as the ultimate way to ensure that collective decisions are made. The voting system is pretty simple as it involves only a few simple steps. First, proposals regarding the
topic of discussion are submitted on the DAO. Then, voting occurs on the platform, where community members can cast their votes after carefully reviewing proposals. Finally, results are announced, and the changes are implemented automatically after that. With
a DAO, every user can now become part of decisions made in the NFT marketplace platform, and achieving uniformity is the end goal of the DAO model.
How Can Users Earn Through a DAO-enabled NFT Marketplace?
A user can earn voting rights of different categories depending on the conditions set on the DAO that is needed to be achieved. For example, if a user has more than a particular number of native tokens, they will be entitled to a higher voting category,
with their votes mattering more. Also, such rights mean more access to the protocol, which can give them opportunities for increased participation and makes it easier for putting up proposals.
In a DAO-enabled NFT marketplace platform, users can earn through rewards for staking and supplying NFTs and native tokens to the liquidity pool. These methods will help users earn passive income while holding the NFT products for themselves (without selling).
As more such platforms arise and more minds combine, newer avenues of rewarding mechanisms are expected to develop in the near future. Yield farming is a new method where users who have both NFT products and native tokens can get rewards by staking their belongings.
Bonuses here are in the form of limited-edition NFT items and native tokens, although the process needs a user to be eligible by satisfying all the conditions.
Some Final Thoughts
Therefore, we can say that DAO-enabled NFT marketplaces are a great business opportunity for those who intend to make the NFT world a better place in terms of giving power to the user. If you are looking to develop such an NFT marketplace that uses decentralized
autonomous organization as the governance tool, there are a few companies that can assist you with the process. Such a firm excels in working on all the aspects of the platform, including design, development, smart contracts, blockchain integration, node creation,
NFT creation, testing, and deploying. You can also expect the features of a DAO to be seamlessly incorporated into the platform, and all the services come at friendly costs.