Hello, can litecoin be transformed into a DAO project? What do you think?
Depending on your definition of a DAO, Litecoin either is one already (the coin is decentralized, where participants can join and leave the network at will, and the laws are codified in the source code) or doesn’t need to be one (it would be detrimental to the project for it to become one).
DAOs usually have a governance token, which could be what you’d use as a criteria to define what a DAO is. While this organization resonates with those familiar with the stock market (a governance token gives voting power, just like shares of an anonymous society), it would decrease decentralization, which would be harmful to Litecoin. It’s exactly because that there is no central point of failure (a governing body) that the Litecoin network is resistant to censorship.
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Thank you for your opinion. My question is more philosophical: who has the greater right to control the fate of the coin? The manufacturer of these coins or the society that uses it?
The answer to that question is simple: the owners and the want-to-be owners of the coins are the de facto ones that set the fate of it.
The monetary policy in fiat currencies is done by the central bank, which can lend money or purchase high-quality assets, increasing the supply of currency, or receiving payments or selling assets, reducing the supply of currency.
In cryptocurrencies such as Litecoin, the issuance of new Litecoin set in code and the trading activity is the monetary policy. When one buys Litecoin, the supply is being reduced, and when one sells Litecoin, it is being increased. It is estimated that the final inflation of Litecoin from today and forward is less than 20% (more than 70 million Litecoins have already been mined, and there’s ony 14 million Litecoin left). So, the trading activity is the major force in the monetary policy of Litecoin, so the equilibrium between existing owners and want-to-be owners sets the price of Litecoin.
This arrangement can be better than the one with fiat currencies, because the monetary policy is decentralized, made from a consensus of those that are involved in it and have skin in the game. Central banks can unilaterally decide to devalue the currency to the detriment of the currency holders, while this is not possible in cryptocurrencies such as Litecoin.
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