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Ethereum is best blockchain to build crypto-project with DAO?

17-Jun-2022 Pankaj Gupta
Ethereum is best blockchain to build crypto-project with DAO?

Ethereum’s dominance as the blockchain of choice for days 

Remains strong, but there is a case being made for other chains which may be better suited.

The crypto community and industry have chosen Ethereum as the chain of choice for most blockchain-based decentralized applications (DApps), 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 EthereumVirtual Machine (EVM) chains. EVM compatibility enables a network to use Ethereum's security features.

Ethereum 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 Solanaecosystem has only 140, and Cardano has 10 DAOs, according to the ecosystem tracker Cardano Cube and Polkadot 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 Deep DAO CEO Eyal Eithcowich in response to a media source. He attributes Ethereum’sdominance to the fact that it is “the chain where the DAO movement started.”

“More importantly, Ethereum is 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.”

Solana is best known for its lightning-fast and inexpensive transactions. Solana’s scalability ensures that all transactions remain under $0.01, and transaction speeds are as quick as 400 milliseconds per block.

Ethereum can only process about 13 to 15 transactions per second. Since the Ethereum main net lacks scalability, L2 Scaling solutions like Polygon, Validium, and rollups have been implemented. Additionally, once ETH evolves Vitalik mentioned that transaction speeds could increase to as much as 100,000 transactions per second, while still maintaining the same level of security.

Additionally, Solana has become vulnerable to infrequent network outages.

The co-founder of the non-fungible token (NFT) game on the EOSIO-based WAX network Alien Worlds, Saro McKenna, told a media source last week that she believes EOSIO is better for buildings.

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 multitasking 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.

In 2016, a DAO raised a record US$150million in crowdfunding to fund the project. The DAO was exploited in June 2016 when US$ 50 million of DAO tokens were stolen by an unknown hacker. The event sparked a debate in the crypto-community about whether Ethereum should perform a contentious "hard fork" to reappropriate the affected funds. This resulted in the network splitting into two blockchains: Ethereum with the theft reversed and Ethereum Classic which continued on the original chain. The hard fork created a rivalry between the two networks. After the hard fork, Ethereum subsequently forked twice in the fourth quarter of 2016 to deal with other attacks.

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 feeless, 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.”

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