A decentralized autonomous organization or DAO distributes the control of a project to its investors and token holders, enabling them to curate a reward-enriched future. 420 DAO, a disruptive DAO, has taken this approach a step further by introducing a new, exciting and first seen-in-the-market concept of Membership Value.
What is Membership Value?
At their core, DAOs are simply groups of people who pool resources together, and then vote on how those resources are allocated. Therefore, maintaining their members’ benefits is one of the DAO’s priorities.
At 420 DAO, membership values are presented both financially and non-financially. The non-financial or intangible values are the wisdom of the community, sense of belonging, shared culture values etc. between the DAO members. The non-financial part is personal to each member and can’t be easily traded. Yet it is what makes a strong, cohesive, mission-driven community.
On the other hand, the financial value is the monetary value if one maintains membership in the long run. But how to design a DAO with financial and quantifiable membership value?
Here are a few key points when it comes to the membership value of a DAO. First of all, the membership value must accrue with time and the size of the community. Secondly, everyone being a member should contribute to the community. Lastly, when one leaves, one agrees to forgo their membership value and ideally, their membership value should stay within the community. In other words, the membership value of one who leaves should not be destroyed but remain within the DAO. And here is the solution that 420 DAO has come up with to embrace those three: a Community Reserve Pool.
What is 420 DAO’s Community Reserve Pool (CRP)?
According to this design, when a member joins the membership, 420 DAO mints some tokens to add them to the CRP, a common property belonging to all DAO members. The membership value of a member is directly represented by the CRP token minted. One’s shares in the CRP represent one’s membership value.
Whenever the member leaves the DAO, the members also forfeit their share of the CRP. Those shares are not destroyed but distributed among the remaining members. Using this innovative model, every member of the DAO will contribute to the CRP and simultaneously benefit as it grows.
Financially speaking, the membership value is always greater than the intrinsic value. Therefore when one leaves the DAO, one also agrees to give up a portion of value that is equal to the difference between the membership value and the intrinsic value (called the fidelity value), which is given back to the remaining members of the DAO.
As an added advantage, the membership value and CRP will prevent a centralized environment or a bank-run scenario. The last member of the DAO will accumulate tremendous value if everyone else leaves.
How to secure membership value at 420 DAO?
Everyone can join 420 DAO by participating in the token’s daily auctions. Everyday during the first 420 days, there will be 100,000 tokens available for public batch-auction. The participants commit their capital in a pool which will be matched against the 100,000 tokens allocated for that day.
The auctions will be conducted on 420 DAO dApp, which will soon be released.
About 420 DAO
420 DAO is a coordinating and supporting body that promotes the development of decentralized economies using its robust tools and 420 DAO token. The project is a revolutionary DAO that has established a dedicated community of crypto proponents, thought leaders, builders, and investors.
The 420 DAO ecosystem is powered by 420 token that has in-build properties such as Store of Value Membership Value Governance value. To learn more about 420 DAO visit,