BitDAO (BIT) is a decentralized autonomous organization (DAO) that provides decentralized finance (DeFi) solutions for other DAOs.
To explain, a DAO is a governance mechanism for blockchain organizations and ecosystems. The DAO issues tokens. Token holders govern the DAO by voting.
BitDAO is a collective of four DAOs. Those DAOs are Mantle, Game7, zkDAO, and EduDAO. BitDAO finances those DAOs activities.
Each of those DAOs uses the BitDAO (BIT) token for transactions. Hence, BitDAO is a decentralized finance (DeFi) solution for DAOs.
Mantle and Game7
Mantle is building an Ethereum layer-2 network. To explain, Ethereum is a slow blockchain with limited capacity. Ethereum was processing 15.032 transactions per second (TPS) on 30 January 2023, ETHPS.info estimates. That means Ethereum can only process 15 transactions at ta time.
A Layer-2 is another blockchain they add to Ethereum (ETH) to increase its speed and capacity. Builders use Mantle to add capacity to Ethereum. For example, Mantle lets a Binance (BNB) DApp connect to Ethereum.
Game7 calls itself an autonomous institution that funds opensource software and solutions for gaming. Consequently, Game7 provides grants to open-source software developers.
The zkDAO is building the zkSync ecosystem with ZK-rollups. A ZK rollup is a layer 2 scaling solution that allows Ethereum solutions to move computation and storage off the blockchain. They claim a Zk-rollup can process batches of thousands of transactions.
A Zero-knowledge rollup (ZK-rollup) bundles transactions they process outside the blockchain. Hence, ZK-roll-ups move transactions outside of Ethereum (ETH) and free up space.
One advantage to this is that apps using ZK-Rollups do not have to pay gas fees to use the Ethereum Virtual Machine (EVM). To explain, the EVM is the digital computer that runs Ethereum.
You need access to the EVM to process transactions on Ethereum. They charge gas fees for EVM access. This can get expensive. For instance, the Ethereum Average Gas price was $23.14 on 29 January 2023. Hence it can cost $23.14 to pay the EVM to process a transaction. Theoretically, ZKDao could reduce those transaction costs to a few cents.
The EduDAO finances blockchain solutions for universities. EduDAO is working with some major blockchains including the Oxford Blockchain Society, MIT Sloan Blockchain (Massachusetts Institute of Technology), Berkeley RDI (University of California at Berkeley), Blockchain at Berkeley, Blockchain at Michigan (University of Michigan) and Harvard Blockchain.
The EduDAO serves an incubator for university blockchain projects. An incubator provides startups with financing, advice, and technical support. EduDAO uses BitDAO to finance its incubation efforts.
What Value does BitDAO (BIT) offer?
BitDAO (BIT) has access to significant resources. For example, BitDAO claimed to have $2.551 billion worth of tokens in its treasury on 2 February 2023.
The BitDAO Treasury holdings included 3.133 billion BIT worth $1.741 billion, 269,947 Ethereum (ETH) tokens worth $451,272 million, 235.737 million USD COIN (USDC) stablecoins worth $236.680million. 73.912 million Tether (USDT) stablecoins worth $74.282 million, 7,432 Univ3 LP Weth synthetic asset tokens worth $12.414 million, 22.756 million Univ3 LP BIT synthetic asset tokens worth $12.544 million, 10,000 PleasrDAO (PEEPS) tokens worth $6.5 million, 11 million APEX Protocol (APEX) tokens worth $4.994 million, and 2.132 million xSUSHI (XSUSHI) tokens worth $4.52 million.
Disturbingly, BitDAO held 3.362 million FTX (FTT) tokens worth $6.590 million on 2 February 2023. FXT is the infamous decentralized exchange formerly run by accused fraudster Sam Bankman-Fried.
The Securities and Exchange Commission (SEC) charged Bankman-Fried and his cohorts with diverting over $1.8 billion in FTX customers’ money to their hedge fund, Alameda Research. The SEC also accuses Bankman-Fried and his associates of lying about risks and using Alameda Research as their personal bank account.
BitDAO claimed to have a trade volume of $13.295 billion on 2 February 2023. Bit’s Partners contributed $3.324 million on 2 February 2023.
Investors in BitDO include controversial billionaire Peter Thiel, Pantera Capital, Mirana, Jump Capital, Spartan, BYBIT, and Dragon Fly. Hence, BitDAO has some high-powered friends and supports.
How Does Mr. Market view BitDAO (BIT)?
Mr. Market thinks BitDAO (BIT) offers some value. For example, BitDAO was the seventh-most trending cryptocurrency on 30 January 2023.
Conversely, CoinMarketCap ranked BitDAO 45th and gave it a 5.551₵ on 2 February 2023. CoinMarketCap gave BitDAO a $1.159 billion Market Capitalization, a $5.541 billion Fully Diluted Market Cap, and a $22.070 million 24-Hour Market Volume on 2 February 2023.
BitDAO also had a $20.483 million Centralized Exchange (CEX) volume and a $1.645 million Decentralized Exchange (DEX) volume on 2 February 2023. They based those numbers on a Circulating Supply of 2.091 billion BIT, and a Total Supply of 10 billion BIT.
In contrast, CoinGecko named BitDAO, its 75th-ranked cryptocurrency, with a 55.35₵ Coin Price on 2 February 2023. CoinGecko gave BitDAO a $645.987 million Market Capitalization, a $22.764 million 24-Hour Trading Volume, and a $5.326billion Fully Diluted Valuation. They base those numbers on a 1.66 billion BIT Circulating Supply, and a 9.610 billion total and maximum supply.
If you are seeking a DAO to invest in. I think BitDAO is worth examining. I consider BitDAO worth examining because it diversifies risk by supporting four DAOs. This could create a diversified DAO investment that could make money from decentralized finance (DeFi).