BitDAO

What is BitDAO (BIT)?

BitDAO is a decentralized autonomous organization (DAO) that governs a treasury, various products, research labs, and entire ecosystems.

With the aim of building a decentralized token economy, BitDAO supports a wide range of blockchain projects. Many of these include other DAOs, decentralized finance platforms, non-fungible token (NFT) projects, and Web3 gaming.

BitDAO’s most important feature is its treasury because BitDAO itself is a collective of contributors. This massive asset pool allocates support to various projects via funding and liquidity bootstrapping as well as research and development.

BitDAO’s governance is carried out via the BIT token, and BIT holders are also allocated a part of BitDAO’s treasury.

When Was BitDAO Launched?

The BIT token launched on the Ethereum blockchain on August 17, 2021. The launch came upon the completion of a Dutch auction on the SushiSwap decentralized exchange’s MISO launchpad.

The Dutch auction raised 112,000 ETH, valued at around $365 million at the time, from 9,200 participants. 180 million BIT tokens were purchased with ETH, and a further 20 million BIT tokens were bought using SushiSwap’s SUSHI token.

Who are the Founders of BitDAO?

According to BitDAO, the organization doesn’t have founders. What it does have are contributors, investors, and partners.

One of BitDAO’s most important contributors is the Bybit cryptocurrency exchange. Bybit has pledged a share of future contract trading volume, and it makes regular deposits to the BitDAO treasury.

BitDAO has carried out a seed token sale as well. Peter Thiel, Founders Fund, Pantera Capital, and Dragonfly Capital led this round, netting BitDAO $230 million. This token sale made these investors major stakeholders in BitDAO.

BitDAO’s remaining list of partners and contributors is a who’s who of the blockchain industry. It includes Spartan Group, SushiSwap, Kain Warwick (Synthetic founder), Polygon, NGC Ventures, Alameda Research, and many more.

According to BitDAO, other notable holders of significant voting shares include Mirana Ventures, Windranger Labs, Pentagon Labs, Davion Labs, and Game7 Labs.

How Does BitDAO Work?

BitDAO runs primarily on partner contributions. These contributions of capital are made in the form of cryptocurrencies or stablecoins, and they go into the BitDAO treasury.

Once funds are in the BitDAO treasury, BitDAO’s governance decides on how they will be used. BIT holders make proposals and vote on them, and if passed, these proposals move on to the execution stage.

Proposals made in BitDAO can cover protocol upgrades, such as new products or partner integration and token swaps. They can also mean grants and funding for various projects.

BitDAO’s website features a list of initiatives and ecosystem funders who have received allocations from the BitDAO treasury.

Token swaps are also a critical part of BitDAO’s protocol because BitDAO looks to swap tokens with existing and emerging projects. By holding these partner tokens, BitDAO is incentivized to help these projects succeed since BitDAO would benefit from token appreciation.

What Makes BitDAO Unique?

BitDAO is unique because it is already one of the largest and most diverse token-governed treasuries in existence.

BitDAO’s treasury can be viewed on the blockchain, which makes it an extremely transparent organization. Unlike various financial organizations whose movements are made in the shadows, BitDAO’s treasury and movement of crypto assets can be viewed by anyone.

BitDAO offers token holders a vehicle to act as a decentralized collective backed by the wisdom of some of the industry’s top investors.

How is the BitDAO Network Secured?

BitDAO itself is a decentralized autonomous organization rather than a blockchain network. Its treasury is a multisig wallet, meaning that the transactions require a certain number of wallets to approve any sort of activity. This ensures protection from any malicious activity from one or a few members.

The design of the protocol in its current phase—phase 1—uses industry-standard components. These include an instance of COMP token, Gnosis Safe, and Gnosis Snapshot.

The funds in the BitDAO treasury are secured by the respective blockchains they are held on. This is primarily Ethereum since BIT is an Ethereum-based token, and so are all the other tokens that make up the treasury.

Ethereum is secured by proof-of-stake (PoS) consensus, having completed its transition from proof-of-work (PoW) in September 2022. PoW blockchains rely on a massive number of computers powering the network, but PoS shifts to economic means.

Validators take the role of miners in PoS. These validators have to bond 32 ETH in the protocol, which represents a significant investment. This stake can be slashed (or confiscated) if the validator doesn’t perform according to the protocol.

On the other hand, validators are also handsomely rewarded in ETH if they do validate transactions properly and maintain high levels of uptime.

What is the Use of BIT?

The BIT token is primarily used in the governance of BitDAO. Holders of BitDAO can submit proposals and vote on them, making various decisions that can affect the DAO’s future.

Non-BIT holders can also discuss the protocol and make suggestions on BitDAO’s forums and social media. These ideas may be picked up and proposed by BIT token holders.

Who Controls BitDAO?

BitDAO is controlled by BIT holders since the BIT token’s main utility is that of governance.

BitDAO is a decentralized autonomous organization made up purely of BIT holders. BIT holders can submit proposals and vote on them, which allows them to make various decisions (for example, which projects ought to be funded).

Partnerships with various organizations are also decided via voting by BIT holders, as is the expansion of the BitDAO protocol through partnerships and token swaps.

How Much Is BIT In Circulation?

BitDAO has a total supply of 10 billion BIT tokens, and over 30% of these BIT tokens are in possession of the BitDAO Treasury. However, as per BitDAO principles+, BIT tokenholders are in control of the treasury tokens in proportion to their own token holdings.

Over 63 million BIT tokens have been burned, leaving a circulating supply of just over 6.78 billion BIT. These token burns are a result of Bybit contributions, and BitDAO’s analytics page tracks them when they happen.

How Do You Buy BIT?

You can buy BIT tokens from various exchange platforms. Bybit, as BitDAO’s main contributor, may be the best one. However, the tokens are available on several other top platforms and decentralized exchanges like Sushiswap.

Is It Possible to Buy BIT Instantly?

You can generally buy BIT instantly from cryptocurrency exchanges when they offer custodial storage. The main disadvantage of this option is that you can’t use your BIT tokens in BitDAO governance.

So, to really become an active BitDAO member, you may have to consider a non-custodial solution to store your BIT tokens.

How Do You Store BIT?

Luckily, the cryptocurrency industry is far more conducive to non-custodial, private storage of assets than traditional markets. BIT tokens can be stored in almost any ERC-20 compatible wallet out there, including Metamask, Ledger, and Trezor.

With the BIT tokens in your private wallet, you can take part in BitDAO protocol governance and vote on proposals on-chain. Before voting, you do need to delegate your voting rights to an address.

This delegation mechanism is designed to add a layer of safety—if a delegate wallet is compromised, you don’t lose your BIT tokens. You can simply re-delegate your tokens to another address if that happens.

BitDAO Energy Consumption

BitDAO is an organization composed of BIT token holders that maintains an on-chain treasury. It isn’t a company and doesn’t have infrastructure, offices, or a blockchain of its own.

Therefore, it’s unreasonable to attribute any sort of meaningful energy consumption to BitDAO. The BitDAO wallets and treasury can be tracked, and they aren’t even much of a contributor toward congestion on Ethereum.

Is BIT a Good Investment?

One of the key contributions BitDAO makes to the blockchain industry is that it funds builders.

BitDAO does not build anything by itself, and proposals that suggest BitDAO itself builds something tend not to be executed. Far more successful are proposals that request funding, with the proposer themselves committing to do the building.

As such, BitDAO is a way for token holders to collaborate in a decentralized manner for the good of the industry as a whole.

Of course, this is heavily incentivized in unique ways. One of the most interesting facets of the protocol may be token swaps, where projects swap their tokens with the treasury. Therefore, if the project is successful and gains traction, BIT holders benefit as a whole from the token’s appreciation.

Retail investors couldn’t hope to compete with some of the institutional investors when it comes to voting power when they buy BIT. Still, BIT offers a much-needed chance to invest alongside those same institutions at long last rather than against them.