Although Ethereum continues to be the blockchain of choice for DAOs, there is a case to be made for alternative chains that may be better suited.
Although Ethereum has been picked by the crypto community and industry as the chain of choice for most blockchain-based decentralised apps, alternative chains may be better suited to handle the burden of decentralised autonomous organisations (DAOs).
Technical advantages and lower transaction costs have yet to become a compelling reason to use Ethereum Virtual Machine (EVM) chains. When a network is EVM compatible, it can leverage Ethereum’s security features.
When it comes to the quantity of DAOs, Ethereum (ETH) and its compatible chains have a clear lead over the competition. According to data from blockchain voting platform Snapshot, they hold over 4,200 DAOs and protocols that require governance members.
In comparison, the Solana (SOL) ecosystem has just 140 DAOs, Cardano has 10 DAOs, and Polkadot (DOT) Substrate has only eight, according to ecosystem tracker Cardano Cube. This isn’t to dismiss the fact that three of the top ten DAOs by the number of choices made in the last seven days are based on Solana, according to DAO tracker DeepDAO.
According to DAO tracker DeepDAO CEO Eyal Eithcowich said, Ethereum’s advantage over the rest could be due to simple, yet practical reasons. Ethereum’s supremacy, he claims, stems from the fact that it is “the chain where the DAO movement began.”
“More importantly, (Ethereum’s) ecosystem has the most mature set of tools for launching and administering all aspects of DAOs, primarily financial but not exclusively. This could alter when other chains become more popular.”
On the other hand, he cited Ethereum’s high gas fees as a drawback. “But, again, the enabling features and tools in the ecosystem are less robust,” he said, adding that Solana allows DAOs to make rapid and cheap transactions.
In addition, Solana has been prone to network disruptions on a regular basis.
Saro McKenna, the co-founder of the EOSIO-based WAX network Alien Worlds’ nonfungible token (NFT) game, told last week that she believes EOSIO (EOS) is preferable for establishing DAOs.
Ethereum, she believes, is too expensive for voting and was created to be a “general-purpose blockchain” capable of handling a wide range of functions. EOSIO, on the other hand, “was partly developed for the purpose of DAOs,” according to McKenna.
“The EOSIO codebase is incredibly strong, allowing for layered multisig permissions and dynamic collection election methods, both of which are essential for DAOs to work effectively.”
Gas fees have long been an issue for Ethereum users, although they were at their lowest point since August last month in March.
Andrew Levine, the CEO of blockchain consulting firm Koinos, has made significant criticisms of EOSIO, which could explain why it is lagging behind Ethereum in terms of adoption. While EOS transactions are almost charge-free, he stated in February that there is an account setup fee. Furthermore, compared to Ethereum, keeping coins on an account is a bit more complicated:
“The EOS database is based on “memory-mapped files,” which are another relic of the Steem architecture, one of the most important consequences of which is that it is designed to employ the most expensive kind of storage available: random-access memory (RAM).”
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.