The DAO was an organization that was designed to be automated and decentralized. It acted as a form of venture capital fund, based on open-source code and without a typical management structure or board of directors. To be fully decentralized, the DAO was unaffiliated with any particular nation-state, though it made use of the ethereum network.
A decentralized autonomous organization (DAO) is an entity with no central leadership. Decisions get made from the bottom-up, governed by a community organized around a specific set of rules enforced on a blockchain.
DAOs are internet-native organizations collectively owned and managed by their members. They have built-in treasuries that are only accessible with the approval of their members. Decisions are made via proposals the group votes on during a specified period.
A DAO works without hierarchical management and can have a large number of purposes. Freelancer networks where contracts pool their funds to pay for software subscriptions, charitable organizations where members approve donations and venture capital firms owned by a group are all possible with these organizations.
How does a DAO work?
The rules of the DAO are established by a core team of community members through the use of smart contracts. These smart contracts lay out the foundational framework by which the DAO is to operate. They are highly visible, verifiable, and publicly auditable so any potential member can fully understand how the protocol is to function at every step.
Once these rules are formally written onto the blockchain, the next step is around funding: the DAO needs to figure out how to receive funding and how to bestow governance.
This is typically achieved through token issuance, by which the protocol sells tokens to raise funds and fill the DAO treasury.
In return for their fiat, token holders are given certain voting rights, usually proportional to their holdings. Once funding is completed, the DAO is ready for deployment.
At this point, once the code is pushed into production, it can no longer be changed by any other means other than a consensus reached through member voting. That is, no special authority can modify the rules of the DAO; it is entirely up to the community of token holders to decide.
Some DAOs to check out
DAOhaus: DAOhaus is a no-code platform for launching and running DAOs. It is owned and operated by the community. If you’re interested in starting your own DAO or exploring the vibrant landscape, look no further.
MakerDAO: If you would like to contribute to the protocol that introduced the world’s first unbiased stable coin, DAI, you can get involved in governance by voting on changes to the Maker protocol.
RaidGuild: This service-based DAO stemmed from the MetaCartel network and is deeply entrenched in the Web3 world. If you’re looking to offer up your developer, marketing, or design skills to the guild, they’re looking for quality talent to continue slaying product demons.
Proof Of Humanity: This sybil-resistant registry of humans uses social verification and Kleros’ courts to distribute Universal Basic Income (UBI) tokens to verified humans on-chain. If you would like to join the justice revolution, start here with this democratic DAO.
Opolis: This member-owned digital employment cooperative offers benefits and shared services for the independent worker. If you’re passionate about the future of work and want to have a say in what that looks like, join here.
BanklessDAO: Interested in spreading the Web3 word and educating the masses through content? This media-centric DAO might be of interest to you. You can learn more here.
MolochDAO: This OG DAO awards grants to advance the Ethereum ecosystem. If you would like to become a governing member and contribute to this group, you can fill out this application.