an eye-watering number by any measure. 4000% is basically chump change. During the last week, I’ve spent a lot of time researching these projects and verifying returns of 500, 000% to 4 million% feels like I’m looking at Internet pop-up ads from 1998. and these organizations have become the newest space to tempt enthusiastic investors into carpeting draws. But I don’t want to ignore the gap fully because the tech at play here could go so far as redefining not just finance, but the lane we organize communities in general. So we’re going to look at some of the most popular DAOs and analyze risk factors that you must consider. And note: Just because I mentioned a DAO project in this video, does not mean I’m recommending you devote. They are simply real-world lessons. Okay , now to define what a DAO actually is. I’m not talking about Dragon Age Origins. This is a Decentralized Autonomous Organization. You can think of these sorts of as the blockchain equivalent of a horizontally organized society – a blockchain cooperative, if you will, or, as Forbes describes it, an Internet community with a shared bank account.The meaning is a community where no one member influences what the organization does without the consent of the majority. Most DAOs have their own governance tokens, which acts as a sort of voter’s ID in money word. And this might resound reasonably familiar because many kinds of crypto, including Bitcoin, are effectively loped by the community who contribute to the blockchain without any central government. But a DAO makes this a few steps further. Now, makes can propose changes to the protocol itself, and members of the community can vote to to accept or to reject these changes. This use of blockchain tech leveraging the ability of smart-alecky contracts has attracted many financiers in this space. Even Mark Cuban requires in on this, he says DAOs are what all organizations will eventually become. In a traditional business, there’s usually a very clear line between decision makers and backers; managers and employees.The impression is you potentially get rid of a lot of the inefficiencies and politics that come with this organizational hierarchy. – Do it five, four, three, two Do it, give me control Michael. However, I do foresee issues now as well. As someone who’s owned my own transactions my part life and employed hundreds of people over the last eight years, I have to say that I’d be willing to say that 90% of decisions make sense to just about everyone, but You can see this in makes of big firms. You know, they often feel uninspired and precisely carrying, like how nearly every single SUV looks the exact same. There are just too many decision makers and too large of focus radicals at these huge corporations and due to sheer crowds, anything specially amiable or different gets elected out and you’re left with the least offensive commodity possible, and this will be a feature that DAOs will eventually have to overcome.Now, generally, there are two kinds of DAOs. First, the investment firm model where major decisions involve determined on which resources to buy. An sample of this is PleasrDAO, who paid$ 4 million for the sole replica of a Wu-Tang Clan album. And the other kind manage blockchain projects together, Many of these kinds of projects use stablecoins and deserve income by emerge alliances, or allowing users to stake their regards. Utilizing stablecoins allows the market in general, to focus on the performance of the protocol rather than worry about whether the clue that they’re using is going to merely cistern. Now on to the top programmes. OlympusDAO was a project that aroused my curiosity, routing me down a rabbit excavation of Reddit yarns. They’ve been one of the few successful jobs putting some credibility into the DAO market. Prior to Olympus, DAOs were mostly seen as Ponzi schemes. Now they’re arguably better Ponzi schemes .[ Laughs] Olympus implemented a few nips to their protocol that kind of changed the game. The most important change is the OHM token. This is the token native to Olympus DAO and it doesn’t exert a dollar peg. This decision was in part due to the depreciation of US dollar peg stablecoins. OlympusDAO exploits a modeling of bails, liquidity pools, and staking to incentivize adoption of their protocol. Stakers in Olympus are given a portion of recently minted OHM tokens every 8 hours, and this drives the promise of their 4000%+ APY. Harmonizing to their FAQ page, each OHM is backed by at least one Dai stablecoin at all times. And it’s important to note that Now, part of the magic here is something announced rebases. This is a DAO-initiated injection or contraction of the sign give within the market. This helps to defend a price point or to manage inflation in this ecosystem. Now, even though the rebases often leant brand-new token give immediately into holder’s pouches, they aren’t the same thing as jeopardize honors, which are more consistent.And the thing is, this isn’t perfectly trustless right now. Only about 20 parties, which I decided to call “The Knights of the DAO table”, are involved in these strategic price manipulations for Olympus. They intend to make this process decentralized in the future. However, this is something that I mentioned earlier. Some decisions will be tough to have a majority vote on. and it’s kind of satirical that something boasted as decentralized and algorithmic became successful through human intervention, but this might be necessary, at least in the beginning, to get to a station of stable proliferation. A number of projects have forked from OlympusDAO, shaping utilize of its staking mechanism and even the OHM token itself. And this has led some experts to think that OHM could become a standard for DeFi in the future.But of course, only epoch “re going to tell”, And a memorandum of prudence now: Various other projects like Spartacus Finance have forked from the Olympus protocol, but that doesn’t mean that they’re the same campaign or that the teams are the same and your earnings could be wildly different if you invest in a fork. Now, something you may be interested in investing in, is a membership to my Patreon community. There you’ll detect all my buy and sell notifies, live rivers and added material that is not posted on YouTube. It really is the best darn deal on the Internet. That’ll provide a link in the description below. Now, the primary opponent to Olympus at the time of writing of this video is announced Wonderland. They use a sign called TIME. Both Olympus and Wonderland have staking as their core functionality and go through supply rebases to raise the cost of the sign up or down. However, there are a few key differences.First, Wonderland’s TIME token is based on the Avalanche blockchain, while Olympus is based on Ethereum. The interest of going with Avalanche is that the fees are substantially lower and it can handle more deals at a time. This is very useful, considering how many deals can happen in a single period on DAO etiquettes. Where Olympus DAO was offering 4,400% APY, Wonderland is currently around 80,000%. The first is whether the price of the token will hamper its ethic for such courses of its first year. If the price of the TIME token descends by the time you reach that 80,000% increase of clues, your total gains will be less than 80,000%, potentially a lot less if it descends all the way down to its backed cost. So let’s say you bought two TIME tokens and paid $7,000 for the trouble.If they remained at $ 3,500 per token during the course of the year and you were given staking wages of an additional 1600 TIME tokens,( an 80,000% return) well, then you’d be rolling in it. You’d have five and a half million dollars before you reached your next birthday. This is insane, I know. It’s also important to note that APYs will be increased over period as these projects get larger.Now, on the other hand, worst case scenario, if the DAO utterly slumps to its backed appreciate of$ 1, then you would have net earnings after staking compensations remunerations of negative $5,400 on your $7,000 investment. Now, something this dramatic generally merely happens in a swindle, but it’s important to consider both best and worst case scenario in any speculation. Now, looking at the price trends and considering the amount of signs coming minted every 8 hours, I can feel the spirit of Jerome Powell telling me to watch out for inflation. And an important question to ask yourself with these DAOs is: are they Ponzi schemes? The answer is yes, but depending on your interpretation of Ponzi scheme. Even the founder says that it could be, – Is it a Ponzi? – Well, I guess. – Depends on your perspective. -[ Laughs] we all desire the Ponzi right? If you look at it as an investment where you make money as a result of other beings meeting, then perfectly yes, it’s a Ponzi. But if you look at it as a brand-new route to distribute tokens to owners similar to an Airdrop or an ICO, then it may not be a Ponzi.The line here is extremely blurred. But either way, this is high risk, high-pitched wage possible field. And I recommend experimenting this even further before making any crazy decisions. And this generates me to the next region. How to lose money with DAOs? I could go on and on talking about interesting DAO projections but with information on these projects being fairly limited to gatherings and Reddit weaves, it’s pretty hard to decipher whether research projects has real value or if the shills are simply screaming louder than the truth. And because of this, I’ve created a checklist that you can use to help determine if a DAO is a scam. This will be free in the specific characteristics, all I ask for is a subscribe on the path for the hassle.I made this checklist because DAOs are a bit different from tokens, you have to get inventive now. Generally you can see whether a copper or a sign is worth bracing long term. based on the founder’s credibility or a white paper, or merely other information available. DAOs don’t always have the information collected. For the most part, you’re taking an anonymous team’s parole for whatever they say they are going to do and “youre reading” million percentage APY anatomies or tech explosions or light-footed articles or only the lack of information provided. In fact, if you check isthiscoinascam.com for Olympus and Wonderland, both come poor ratings because of how limited the information is and those are the biggest DAOs right now. So here are a few red flags to look out for. First, the team has not secreted a increment programme or the programme seems too simple. Second, anonymous benefactors or influencers might say that there is a fortune waiting if you just go ahead and buy their token.And we’ve found in this channel before that many influencers will say just about anything for the right price.* Lindsay Lohan* third, is there little information on how its optional protocol decisions are made? 4) The system is not examined. 5) The crypto isn’t backed by any resource. 6) The squad has not started other crypto campaigns before. This one’s kind of up to you, but the risk that you’re taking on is huge if the anonymous makes have no provable suffer. 7) There’s a decrease in social work, and this is one of my scouts for crypto in general, but it’s especially important for DAOs who rely on brand-new investors to expand the treasury, enabling those truly high stake wages that DAOs are now famous for. At this station there are already numerous DAOs which has come to an end up as flat out rug pulls.So high prudence is necessary if you’re trying to go full on Degen investor. I think this is a space that will progress with much more credibility and opennes over era, but for now it’s the Wild West. Can investor demand keep up with venturing remunerations? The only answer is yes, until it can’t. And from here I recommend you check out my canal sponsor BlockFi. BlockFi allows you to earn interest , not 4 million% interest, pretty good interest on your crypto and you’ll get up to $ 250 in free Bitcoin by using the link below to sign up.I also recommend checking out this video of mine on the highest stable coin returns possible. I wish to thank you so much for watching and I hope you have a profitable daytime !.