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 of Ethereum Virtual Machine (EVM) chains. EVM compatibility allows a network to take advantage of Ethereum’s security features.

Ethereum (ETH) and its compatible chains have a clear advantage in the number of DAOs compared to all others. They host more than 4,200 DAOs and protocols that require snapshot governance participants, according to data from the blockchain voting platform.

In comparison, the Solana (SOL) ecosystem has only 140, Cardano has 10 DAOs according to ecosystem tracker Cardano Cube, and Polkadot (DOT) Substrate says it has only eight. This is not to disregard the fact that among the top 10 DAOs by number of decisions made in the last seven days, DAO tracker DeepDAO shows that three are based on Solana.

Ethereum’s lead over the rest could be for simple but practical reasons, according to Eyal Eithcowich, CEO of DAO tracker DeepDAO, in email replies to Cointelegraph. He attributes Ethereum’s dominance to the fact that it’s “the chain where the DAO movement started.”

“More importantly, (Ethereum’s) is the most mature ecosystem in terms of tools to launch and manage all facets of DAOs, mainly financial but not only. This may change as other chains become more popular.”

On the other hand, he pointed to high gas fees as a shortcoming of Ethereum. He added that Solana allows DAOs to transact quickly and cheaply, “but again, the supporting features and tools in the ecosystem are less robust.”

Additionally, Solana has become vulnerable to rare network outages.

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 suited for building DAOs.

In their view, Ethereum is too expensive for voting purposes and was designed as a “general purpose blockchain” to handle a variety of different tasks. This is in contrast to EOSIO, which McKenna says was “built in part for DAOs”.

“The EOSIO codebase is extremely powerful, enabling multi-level multisig permissions and dynamic collection election mechanisms, which are critical for DAOs to function properly.”

Gas fees have long been a concern for Ethereum users, but in March fees were at their lowest since last August.

Related: Opera integrates Bitcoin, Solana, Polygon and five other blockchains

However, the CEO of blockchain consulting firm Koinos, Andrew Levine, had voiced criticism of EOSIO, which could explain why it is lagging behind Ethereum’s adoption rate. In February, he wrote that while EOS transactions are virtually fee-free, there is an account creation fee. Also, holding coins in an account is quite complicated compared to Ethereum:

“The EOS database is based on so-called “memory-mapped files”, another holdover from the Steem design, the important consequence of which is that it is designed to use the most expensive form of storage possible: random access memory ( memory).”