A DAO is an online community with a shared treasury owned by its contributing members. DAOs use tokens to give contributing members an ownership stake in the community.
Why should I care about DAOs?
DAOs are communities where creators and fans can own the upside from their work. Fans that hold your community token are more motivated to:
- Help you grow your audience
- Provide feedback on your content (e.g., vote on what videos you should make)
- Co-create or invest in what you’re planning next
DAOs shift the focus from individuals to a community that wants to succeed together.
How does a DAO work?
The simplest way to describe how a DAO works is to compare it to a company:
Practically speaking, most DAOs use:
- Communication tools like Discord to stay in touch.
- Governance tools like Snapshot for members to vote on decisions (e.g., hiring someone).
- Asset management tools like Gnosis Safe to manage the DAO’s treasury.
What are some examples of DAOs?
Examples of DAOs include:
- Social DAOs to interact around similar interests. For example, Friends with Benefits is a private social club that builds products and offers IRL private events. To join, you need to hold 75 $FWB tokens.
- NFT DAOs to invest and own NFTs (non-fungible tokens) as a community. For example, Flamingo DAO bought an Alien Cryptopunk NFT for 605 eth (~$761K) in January 2021.
- Protocol DAOs to transition a project from a core team to community ownership. For example, Uniswap DAO issued UNI tokens to let its community vote on how to evolve the protocol.
- Commerce DAOs to let a community co-own a retail or ecommerce business through tokens. For example, E1337 DAO (pronounced elite) is a luxury apparel brand owned by 1337 token holders.
- Media DAOs to empower a community to produce content around a mission. For example, Forefront DAO produces content around social tokens.
How do I get involved in DAOs?
You can get involved in DAOs in three steps:
- Find a DAO who’s mission resonates with you. You can get recommendations on DAOs to join by browsing Twitter.
- Join a DAO’s community and hang out. Make an effort to get to know the DAO’s active community members. Be helpful, genuine, and make yourself useful.
- Start contributing to earn tokens. Get involved in a project or pick a task from a DAO’s bounty board. Start earning tokens so that you can get ownership stake in the DAO.
How do I create a DAO?
Setting up your DAO typically includes the following steps:
- Set up a community of core contributors. Find people who you trust and enjoy working with. Define the DAO’s mission, vision, and key values together.
- Create a community token. Make sure you define your tokenomics first. Work with core contributors to answer questions like:
- What percent of tokens should be given to core contributors?
- Should the token be distributed via fixed supply or bonding curve?
- How will governance work? (e.g., what vote % is needed to approve an action?)
Design incentives for community members to earn tokens.
For example, you can create a bounty board where members can do tasks to earn tokens (e.g., write a blog post or make a video thumbnail).