Crypto, NFTs, and DAOs – it’s becoming a thing. You might have heard those words flying around more often in the media lately. But what does it actually mean?
In order to demystify the world of web3 and its tools and to show what they actually can do, without being a huge investor or a developer, I hope that I can explain the possibilities and use cases of them a bit better with this and future posts.
Let’s start with the DAO.
A DAO is a Decentralized Autonomous Organization.
In simple words, a virtual equivalent of a physical collective, foundation, company, or even a group of friends.
Astro DAO built on the NEAR Blockchain makes is incredibly easy to spin one up.It is a tool that allows you to hold a treasury, buy, hold or send NFTs, create “bounties” (little tasks that should be fulfilled in order to receive a reward”), and most importantly: that is managed by its members because everything relies on votes on chain. What does this mean? It means that every change that should/could happen within the DAO (sending out tokens, voting on a poll, adding new members, or even just changing the logo of the DAO) needs to be done through proposals. And only once the council (or the community) casts a vote, the action will take place.
To give a concrete example: Even the council/ creator of a DAO is unable to withdraw all the funds of the DAO alone. In order for this to happen, they would have to request a payout, but if no one votes on it, the funds will not leave the DAO. = Decentralization at its finest.
To get a visual idea of DAOs, you can have a look at Astro DAO, which is built on the NEAR blockchain and is a Dapp to create DAOs on NEAR.
I have lately encountered several folks who run DAOs. When asking them about their goals or current workflow, where the DAO is built on, or what they actually do with it, the main reply was either: “Not sure about the technical side, NFTs?” or “We have a great community”. Splendid.
Don’t get me wrong, this is a great start. And the DAOs that I am part of are also not 100% decentralized at this point (for several reasons. Next hot take will follow eventually). But the tools of web3 allow us to do so much more with it other than gathering financial support and buying NFTs from the market.
How do you decentralize?
When running a DAO on Astro, you have the possibility to create several different groups, each with different voting rights. What I have learned is that you might want to scale up slowly with the voting rights (depending on the project of course). Decentralization has a lot of perks but members should truly understand the purpose of the DAO and their responsibility before voting on the treasury for example. Again, this is just my opinion, you could obviously have a 100k treasury fully handled by the community and give it a try.
An experiment that we have started in the muti DAO recently was to not only have a council group but also a group for our artists. The core idea behind this is to include the community in a way that they can voice their opinion and have an influence on decisions that the DAO takes.
The first ones we onboarded have been visual artists who received a stipend from us. They have now their own group within the DAO and have the power to request changes and vote on polls. After receiving a stipend, we consider them to be active and with enough knowledge to be able to also vote on the next stipend. It offers the chance to state their opinion and directly influence who will receive the next support from the DAO. You see, this is only the first step. Ideally, the system and subdaos will grow so the decisions will eventually include more than that.
Another example is INA DAO, which started to include the community by giving them the option to vote on creative competitions. Each active member can request to be added to the DAO “community group”. Once it has been approved, they are able to vote on polls for the competitions and therefore have a direct impact on the DAO’s decisions and way to move forward.
No one ever said it was easy, or is it?
Obviously, all of this wants to be well thought through or simply tested out as nothing is perfect (and this is still a very new and brave world). You might encounter issues like people still trying to manipulate the outcome of the polls by actively trying to get their members to vote on their submission or getting the council on their side.
You currently also need to create one poll for each artist/question that you want to ask the community. So the creation of 10 polls at a time for example is still time intensive. There is also a fine line between transparency and privacy. So members who vote probably need to see what they are voting on, members outside of the DAO maybe not, especially if it includes sensitive data such as names/identities. While everything in the DAO is on-chain and transparent, you need a way to respect both aspects. It is more than possible though, as those two DAOs have proven it.
A DAO of DAOs
Another great example is -obviously- Marma J DAO. If you have a look at the DAO page, you will see that the groups themselves consist of DAOs – a DAO of DAOs has been created. This means that no individual has voting power anymore, only DAOs that are affiliated with Marma J and have earned their role as advisors. This takes community and decentralization to a new level.
Hands-on
If you haven’t set up a DAO yet but would like to, follow this guide which explains the setup on Astro DAO. You can also always play around first on Testnet. The interface and functions are the same. Just that the DAO will not be published on Mainnet and you will not spend any tokens. For you to do that you simply create a testnet wallet and log in to the Astro testnet.
So how do you create those subgroups on your DAO?
Regardless of Mainnet or Testnet, you can do this either directly during the DAO creation, or if you already have an existing DAO, through proposals. Bear in mind that in this case, the other members of the DAO need to be available to vote on the changes so that they can be implemented.
Here is a video about creating the subgroups when creating a new DAO.
Have a look at this video if you want to create a group on an existing DAO.
Main points to consider:
Always ask the new members first if they would like to be added to your DAO.
DAO subgroups can be deleted through a proposal.
Proposal rights:
Which proposals can the new members send to your DAO? What changes can they request? Are they allowed to request a change regarding the finances, members, visuals, etc.? Keep in mind that this concerns only the proposal creation, it is not related to their voting rights.
Voting rights:
What is the new group allowed to vote on? Your treasury, new or old members, polls? In this step, you are determining the voting power of the new group.
Other possible use cases:
I’ll not give you a blueprint for that one. Get creative and let us know what you will use your DAO & subgroups for!
Viva la DAOism!