Is Ethereum really the best blockchain to form a DAO?
The crypto community and industry have chosen Ethereum as the chain of choice for most blockchain-based decentralized applications, but other chains may be better suited to handle the workload for decentralized autonomous organizations (DAOs).
Technical advantages and cheaper transactions have yet to become a major pull factor from Ethereum Virtual Machine (EVM) chains. EVM compatibility enables a network to use Ethereum’s security features.
Ethereum (ETH) and its compatible chains have a clear advantage in the number of DAOs compared to any other. They house more than 4,200 DAOs and protocols requiring governance participants according to data from blockchain voting platform Snapshot.
Comparatively, the Solana (SOL) ecosystem has only 140, Cardano has 10 DAOs according to ecosystem tracker Cardano Cube, and Polkadot (DOT) Substrate says it has just eight. This is not to discount the fact that among the top 10 DAOs by the number of decisions made over the past seven days, DAO tracker DeepDAO shows that three are based on Solana.
Ethereum’s leg up over the rest may be due to simple, yet practical reasons, according to DAO tracker DeepDAO CEO Eyal Eithcowich in emailed responses to Cointelegraph. He attributes Ethereum’s dominance to the fact that it is “the chain where the DAO movement started.”
“More importantly, (Ethereum’s) the most mature ecosystem in terms of tools for starting and managing all facets of DAOs, mostly financial but not only. This may change as other chains grow in popularity.”On the other hand, he pointed to high gas fees as a shortcoming of Ethereum. He added that Solana allows DAOs to make fast and cheap transactions, “But, again, the supporting features and tools in the ecosystem are less robust.”
Additionally, Solana has become vulnerable to infrequent network outages.
The co-founder of the nonfungible token (NFT) game on the EOSIO-based WAX network Alien Worlds, Saro McKenna, told Cointelegraph last week that she believes EOSIO (EOS) is better for building DAOs.
In her view, Ethereum is too expensive for voting purposes and was designed to be a “general-purpose blockchain” to handle any number of different tasks. This contrasts with EOSIO, which McKenna said “was partly built for the purpose of DAOs.”
“The EOSIO codebase is extremely powerful, allowing for layered multisig permissions and dynamic collection election mechanisms that are critical for DAOs to function properly.”Gas fees have long been an issue for Ethereum users, but in March, fees were at their lowest levels since last August.
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However, CEO of blockchain consulting firm Koinos, Andrew Levine, had pointed criticisms of EOSIO which could explain why it falls short of Ethereum’s rate of adoption. In February, he wrote that while EOS transactions are virtually fee-less, there is an account creation fee. Furthermore, holding coins on an account is fairly complicated compared to Ethereum:
“The EOS database is built on something called “memory-mapped files,” another vestige of the Steem design, an important consequence of which is that it is designed to use the most expensive form of storage possible: random-access memory (RAM).”