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# 2HOT DAO
## What is a DAO
A Decentralized Autonomous Organization (DAO) is an on-chain system designed to give the governance of a protocol back to its users. By owning the governance token, you own the right to vote on decisions taken for the future of the protocol and platform. These governance rules are applied on-chain, by smart contracts, where all information is freely accessible.
## 2HOT DAO
The 2HOT is a Decentralised Autonomous Organisation that manages the liquid staking protocols by deciding on key parameters (e.g., setting fees, assigning node operators and oracles, etc.) through the voting power of governance token (xHOT) or NFTs (xxxHOT). Also, the DAO will accumulate service fees and spend them on research, development, and protocol upgrades. While the same time gives an option for participants to EARN (personally) on the 2HOT PLATFORM (e.g., creator fees, creators gifts, referral creator, votes, etc.)\
\
2HOT is already working on Early Adopters Campaign to grow community members to actively contribute to the project. First Early Adopter Campaign (in the future EAC) will be activated by the xHOT token AIRDROP, which will be done in late April 2023. (read more in the token docs)
## Why DAO
The DAO is the logical compromise between full centralization and decentralization, which allows the deployment of competitive products without full centralization and custody on the exchanges. A DAO is an optimal structure for launching 2HOT as:
* DAO is essentially a decentralized entity, which is enabling a focus on community and might offer a more socially-conscious structure and consequent decision-making;
* DAO will be able to cover the costs of developing and upgrading the protocol from the DAO token treasury.
* Other management activities as well if there is a technical ability
* Adult platform performance and realibility
The DAO will accumulate service fees from 2HOT, which is funneled into the insurance and development funds, distributed by the DAO.
## Functions
2HOT is managed by the 2HOT DAO. The DAO members govern 2hot to ensure its efficiency and stability. The 2HOT DAO should do the following:
* Build, deploy, update, and decide on key parameters of liquid staking protocols, and approve incentives for parties that contribute towards DAO’s goals
* Node operators' management. Assign initial DAO node operators, scout and qualify new node operators and penalize the existing ones slashed by chains rules
* Security, bug bounty program, respond to emergency
* Accumulation of service fees from 2HOT, which can be funneled into the insurance and development funds, distributed by the DAO.
* Control, check, and research the 2HOT Adult platform constantly, so there is no chance of prohibited things
* Make decisions on the future plan and program for both 2HOT DAO & 2HOT Adult, and earn rewards by collecting the fees (based on the voting POWER in DAO)
## Governance
The `xHOT` token governs all 2HOT DAO governance and network decisions to ensure its prolonged stability and decentralized decision-making to facilitate the growth of fair, and transparent liquid staking. xHOT token address will be created on the Ethereum network, and available after \*EAC, in the public sale.
To have a vote in the 2HOT DAO, and to contribute to the determination of any of the topics outlined above and earn, one must hold the xHOT governance token. Holding xHOT gives DAO members a vote in the future of 2HOT, allowing each DAO member to have a personal say in the community. xHOT voting weight is proportional to the amount of xHOT tokens a voter holds. The more xHOT tokens on a user’s address, the greater the decision-making power the voter gets and earns more fees collected on the 2HOT Adult platform.
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