The all-in-one beginner’s guide to creating your very own Decentralized Autonomous Organization with various useful tools and apps recommendations.
Introduction to DAOs
Decentralized autonomous organizations, or DAOs, is a community-led organization that has no central authority taking full control. One of the first few and most famous DAOs to form was called “The DAO”, which was launched in April 2016 and had raised more than $150 million in funds to design a system that is automated and decentralized.
The backbone of every DAO is the use of smart contracts, which defines the foundation and rules of the DAO, as well as automatically executing decisions and protocols that are agreed upon by the community members of the DAO. DAOs are also fully autonomous and transparent, as every single proposal, vote and even the code of the smart contract are available for all to see and be publicly audited.
Community members of a DAO who hold a certain amount of governance token will be able to participate in the decision making and voting of new proposals and improvements for the DAO itself.
How that you have understood a little bit more about DAOs, let us guide you step-by-step on how to create and launch your own DAO from scratch!
1. Deciding on Structure of the DAO
Before you start to hire developers and community managers for your DAO, you need to first decide on the structure and type of DAO you want to create. There are many different types of DAOs out there with different underlying missions and work towards different goals. Here are some examples of the more common DAOs you may want to create:
Examples of Protocol DAOs include OlympusDAO and MakerDAO. These DAOs focuses on governance using decentralized protocols that are created using smart contract technologies. With their own tokens, such as $OHM and $DAI, it allows holders to vote on the governance of the DAO, while also providing value and incentivizing loyal holders with crazy ROI from staking their tokens.
This type of DAO is more commonly found for NFT projects. Holders of these NFTs become members of the DAO and they generally have the rights to vote and decide on the direction of the project post-mint. Examples of popular NFT projects include KaijuKingz, Llamaverse and Azuki. This type of DAO relies a lot on community building, and we can often see members of these projects representing their community on Twitter actively.
Social DAOs are a platform for the crypto community to come together and network. Given that the crypto and NFT space is mostly an anonymous one, social DAOs provide the portal for people from different backgrounds to share and voice their ideas and opinions, as well as discuss on common interests. Examples include Krause House and Developer DAO.
After deciding on the type of DAO you want to create, it is time to create a name for your DAO. Once you have set a name, it is important to set up different platforms for your DAO to grow and engage with your community. Some of the popular platforms used include: Twitter, Discord and Telegram.
Twitter: This is the heart of the crypto and NFT space, where most if not all of the crypto community gather to share their thoughts on the space or to look for new projects and DAOs to participate in. This is where you will gather most of the attention and bring in new members for your DAO.
Discord: Discord has become one of the most popular platforms for projects to engage more closely with their community. It has the ability to hold thousands of users and bring every member of the community together to network and interact.
Telegram: Telegram channels are a great way for DAOs to post their announcements and keep their community updated. This is beneficial to those who may not be online on Discord 24/7.
2. Creating your DAO
For bigger businesses or startups with sufficient funding, they may choose to build their DAOs from the ground up. Meanwhile, there are various DAO templates and websites available to use or assist in the creation of your DAO:
DAOHaus is a protocol that allows users to create their own DAO using the latest Moloch V3 framework. The process of creating a DAO is streamlined as it only requires the setting of a few parameters, such as the type of DAO being launched, the addresses of the DAO’s members, and the DAO’s metadata such as name and website link.
Aragon is an open-source platform that allows you to launch and maintain your DAO. It has a toolkit that allows developers to create with more transparency and customizability, and also a framework called Aragon Govern that helps with the on-chain execution of governance decisions and dispute resolution.
CyberK is a blockchain development company that helps businesses and startups to streamline their entry into the Web3.0 space. They have designed a DAO template that is customizable to different clients’ needs and implementation of their DAO template is highly streamlined to ensure the DAOs are up and running in no time.
Snapshot is a decentralized voting tool that allows DAOs to create proposals and vote off-chain using governance tokens instead of actual crypto.
3. Creating your DAO Treasury
Every DAO needs a treasury to store their raised funds and manage their tokens. Depending on the blockchain that the DAO is implemented on, as well as the size of the DAO treasury, there are different kinds of treasury management tools available such as:
Safe is a decentralized custody protocol and asset management platform on the Ethereum network. With Safe’s multi-signature wallet, you can set the minimum number of accounts and signers required to allow a transaction to go through for your DAO, so that no one member of your DAO community can move the funds independently.
Juicebox is a programmable crypto fundraising protocol that allows DAO projects to raise funds for future developments. Being built on the Ethereum network, projects are able to create a Juicebox project in just 10 minutes.
Utopia is a tool that allows DAOs to organize and facilitate payments, categorize each transaction and provide in-depth analysis of the project spending and funds.
4. Grow your Community
As with any other NFT or crypto project, the community behind the project is the key to success. By building a strong and inclusive community, it can helps the DAO to become more well-known through the word-of-mouth. It is extremely important to let your community know that they are being heard and that the interests of the community is being placed first. The more decision-making there is for the community, the more involved they would feel and it would help them feel a sense of belonging.
With more of the crypto community wanting more say in the projects they invest in and greater transparency, DAOs are becoming more and more popular with many NFT projects implementing it to attract more investors. As more platforms and websites are coming up with new ways to streamline the process of creating DAOs, DAOs will become more mainstream and easier to implement. However, we must not forget that the hardest part of creating your DAO would be to grow your community and getting them to stay for the long run.