Bitcoin and Ethereum are arguably the two most popular cryptocurrencies out there. Over the past few years, the question has been asked over and over again, “which is better Bitcoin or Ethereum?” The answer depends on your needs and investment goals. But what if you have the best of both worlds by combining the security of Bitcoin with Ethereum-based smart contracts? This is where Syscoin comes in.
Syscoin is an open-source decentralized project that leverages the best of Bitcoin and Ethereum through a coordinated platform. Syscoin has developed its own Network Enhanced Virtual Machine (NEVM). As explained by the developers, Syscoin’s design maintains the “gold standard” security of the Bitcoin consensus mechanism and merged mining, while offering the performance characteristics expected in the future of Ethereum 2.0 thanks to the L2 ZK Rollup technology.
We covered Syscoin late last year after the company announced the completion of the first phase of its NEVM launch, in which its bitcoin-secured Layer 1 for EVM smart contracts hit the mainnet at block 1,317,500. The upgrade allows users to simultaneously enjoy all the benefits of Bitcoin’s POW security and the flexibility of smart contracts on a modular chain built to remain decentralized, scalable, and affordable indefinitely. Since our last story, the team has been working behind the scenes on the next phase of their project.
Today Syscoin introduced DAOSYS, a new initiative that will revolutionize DAO governance. During his speech in Dubai during the Binance Blockchain Week 2022 conference, Jag Sidhu, President of the Syscoin Foundation, announced an initiative to set a new standard for decentralized autonomous organizations (DAOs). The Syscoin Foundation has launched a project that it believes represents a significant evolutionary step for DAO technology that can breathe new life into the segment. The group also intends to advance the first implementation of its revolutionary new model in 2022.
To date, DAOs have been hit by key issues across the board and have failed to reflect the cryptocurrency ethos. The fundamental value proposition of cryptocurrency is self-managed capital. ‘Not my keys, not my coins.’ Currently, DAOs take ownership of users’ funds by holding them in a treasury controlled by a few people. Similar to not being able to control the keys to your own wallet. Furthermore, current governance solutions are not designed to respect stakeholder values. Typically, the governance does not directly control the protocol, but merely acts as an advisory voice for the signers of the multi-sig, which controls the treasury. This is compounded by the typical disconnect between a DAO governance token and the protocol’s intrinsic value proposition.
DAOSYS aims to solve these problems with a revolutionary model for coordinating cryptocurrency as an investment. The Syscoin Foundation believes that DAOs should function more like pure AMMs; an autonomous and permissionless protocol that anyone can use to utilize the services of the DAO and act effectively as autonomous economic actors. That means DAOs need to mature out of the current phase of maximizing capital extraction. The profitability must be tailored to the mission statement of the DAO and implemented in such a way that no external controls are required.
Before this initiative, it was nearly impossible to establish a proper DAO with the state of the art of smart contracts and DeFi design. However, by iterating the AMM model to generalize the process, it is possible to deploy DAOs as simply as a liquidity pool. By applying antifragile tokenomics and integrations with DeFi protocols, a treasury management platform can be realized without the need for a governance token. The DAOs of the future can use existing markets as a basis for coordinating capital to implement mission statements. This technology – the Autonomous Service Engine – is present in DAOSYS.
DAOSYS will consist of a reference architecture leveraging the Autonomous Service Engine to make Syscoin a hotbed for innovation through self-sovereign wealth management. The anti-fragile market design leads to a risk-reducing financing mechanism. This shifts the main risk of funding new projects and initiatives to simple opportunity costs, resulting in some incredible efficiencies for the Syscoin Foundation treasury and for other participants. DAOSYS will be advantageously positioned to drive digital value from the roots upwards, as it is poised to drive the evolution of the Syscoin ecosystem, a full-stack, layer-1 blockchain with a modular design that includes a scalable layer 2 supported.
This initiative and its DAOSYS implementation are part of a larger goal by the nonprofit Syscoin Foundation to provide the advances needed for DAO technology to disrupt for-profit corporate and NGO funding by becoming a key driver of innovation.
Founded in 2014, Syscoin is an open-source decentralized project whose NEVM blockchain combines the best of Bitcoin and Ethereum into a single coordinated modular platform. Syscoin ushers in the next step in the evolution of blockchain technology, offering the proven security of Bitcoin and the Turing-complete programmability of Ethereum, boosted to true scalability via ZK-Rollups and other Layer 2 technologies.
The project is represented by the non-profit Syscoin Foundation, registered in Eindhoven, the Netherlands.