Decentralized Autonomous Organizations (DAOs) and Decentralized Finance (DeFi) follow the same line, but they take different paths, both of which can significantly benefit a CXO’s long-term vision. DAOs can provide CXOs with unique mechanisms to develop closer, more inclusive customer relationships and embrace internal cultural shifts. Meanwhile, DeFi mechanisms allow CXOs to develop comprehensive customer-centric financial ecosystems.
However, before discussing how organizations can best use these technologies to support CXO strategies, we need to discuss where they exist. There are two layers for DAO and DeFi for progressive CXO; a practical strategic breakthrough and a springboard into the most disruptive era in the history of Internet technologies.
Gateway to Web 3.0 and the Metaverse
DAOs and DeFi are essential components of Web 3.0 and the Metaverse. Decentralization is the foundation of the next iteration of the Internet and, as with the existing Internet, governance and commerce will continue to be key concerns.
Many CXOs are struggling to find ways to enter the metaverse and transition to Web 3.0. As we have seen many times, the big bang approach does not work. Plus, too many companies get it wrong. As essential technologies, DAOs and DeFi enable organizations to take a use-case-centric approach that instantly adds value and justifies business investment.
Beyond that, technologies can solve existing business barriers in the Metaverse or another Web 3.0 environment. For example, customers may be more inclined to adopt a DeFi-backed customer loyalty program because the returns are much higher than in traditional finance.
The potential of DAOs
A DAO describes itself: It is a decentralized mechanism for the autonomous management of the collective assets of an organization or a democratic community. Although the term has become more mainstream and new to many, the concept is certainly mature. Indeed, from June 2022more than $10 billion was held in major DAO treasuries.
From a CXO perspective, DAOs allow for a superior and more engaged UX. You can create DAOs to onboard customers at all levels of your business. For example, during product development, high-value customers can be given voting rights to determine what they want to see from a new offering, which helps you focus development processes.
Beyond that, DAOs can provide an alternative to stocks, where a percentage of profits, perhaps solely generated by Metaverse, can be split among loyal customers for their continued commitment to your brand.
Internally, DAOs can incorporate the system of stakeholder voting rights to create a more democratic corporate culture. In this scenario, business users can have a direct impact on the direction of growth and therefore feel invested in success.
What to do with DeFi?
DeFi was born out of crypto-economy. However, while cryptocurrencies are purely digital currencies, regardless of their usefulness, DeFi incorporates a much more comprehensive range of financial instruments.
As a CXO, the DeFi space is unlimited. For example, you can launch tokens corresponding to your Metaverse platform or project. These tokens can ensure smooth decentralized transactions in your Metaverse ecosystem. Other than that, it can provide users with potential investment opportunities if you list them on a crypto exchange.
NFTs are a form of DeFi and have already proven to be lucrative for many organizations. In addition to selling NFTs or including them as part of a gamified Metaverse experience as a reward, you can broadcast both tokens and NFTs to customers.
However, digital assets are not the only potential source of income. CXOs could also consider leasing and loans. While more complicated than previous use cases, DeFi lending offers a path to engagement that many brands have yet to use.
By using a loan structure based on Metaverse tokens, you can create digital twins of real products and services and start creating virtual worlds where, like in real life, many items are purchased on credit. The difference is that the cost of a loan, or store credit, in digital tokens is negligible compared to fiat currencies and contained within your ecosystem.
Ultimately, this means you can engage new customers with new experiences that won’t leave them out of pocket, but elevate your brand status and Web 3.0 efforts. Beyond that, you can use the DeFi rental model to franchise virtual businesses – another area where forward-thinking CXOs will find themselves ahead of the curve.
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