All about Decentralized Autonomous Organization (DAO)

DAOs can be categorized in various ways. However, if the classification is based on operational function — which is the most usual — then DAO covers the following forms:

1. DAO Operating System

This is the original DAO. The DAO operating system uses a smart contract as well as a technical interface to assist users in starting DAO.

For example: DaoStack, DaoHaus, Orca.

2. Grants DAO

The community contributes capital and utilizes the DAO to decide how the funds are dispersed to contributors. Allocating cash in the correct areas is faster and easier with DAO Grants than it is with traditional institutions.

Example: One of the most prominent DAO Grants today is Uniswap Grants — Uniswap Grants Program. There are also AAVE Grants, Compound Grants,…

To put it another way, the majority of Grants programs in Defi today are DAO Grants.

3. Protocol DAO

For administration, DAO Grants uses non-transferable shares. DAO was then able to produce ERC20 tokens for trade using the second application, DAO Protocol. Tokens produced by the DAO are used to control the protocol, which means that token holders have the ability to propose, vote on, and alter the DAO’s mechanism.

Most commonly, the DAO Protocol community will vote on how to distribute tokens, liquidity mining, yield farming, or fair launch,…

4. Investment DAO

DAO Investment is a type of DAO that is used to make investment decisions in those tokens. DAO Investment differs from DAO Grants in that there are more regulatory restrictions, but it is the same model that DAOs utilize to make capital allocation decisions.

BitDAO is the most well-known example of an Investment DAO today (BIT)

The primary operations of BitDAO are as follows: — Project funding (similar to DAO funding);

- Protocol development (through collaboration agreements and the creation of new products);

- Investment in the form of a token exchange: Bit token holders will be able to vote on which projects BitDAO will invest in. Then, BitDAO will trade the ETH and USDC that the fund has managed to obtain in order to obtain the project’s token on DEX markets.

5. Service DAO

DAO Service is a freelancing platform — the place to find industry professionals to work on your project. The Service DAO’s actions are managed via lines of code and smart contracts.

Personnel working on DAO Services will be paid in ERC20 tokens rather than transferring or paying via Visa or Paypal as is customary.

6. Social DAO

As social media turns us into a media company, DAO Social turns every group chat into a digital business.

For example: FWB, Seed Club, Radicle, Bored Ape Yacht Club (BAYC), ConstitutionDAO (PEOPLE), LinksDAO,…

7. Collector DAO

Collector DAO is an organization of NFT collectors, incubating NFT projects of lasting value.

8. Media DAO

Media DAO is the Web3 version of traditional news sites and content platforms. One of the most prominent DAO Media today is BanklessDAO and REKT.

DAO’s General Development Law

The DAO can be observed growing along a spectral line, as below.

DAOs that focus on social resources and off-chain governance are the “lightest” version of DAOs — the simplest.

DAOs that focus on financial capital and on-chain operations management are the most “heavy” — and thus the most difficult — type of DAOs.

The current DAO development trend is from sophisticated DAOs with on-chain governance to simple social DAOs with on-chain governance, resulting in a lean digital economy. In the case of DAOs focused on financial resources, the process is gradually shifting off-chain.

Tools that are often used in the DAO community

– Gnosis Safe: A multisig wallet (multi-signature wallet) used for community money management. This wallet is only compatible with Ethereum and ERC20 coins.

– Snapshot: An off-chain voting tool for the project’s token governance. On Snapshot, there is a section for proposals for current prominent DeFi projects such as Balancer, Bancor, Aavegotchi, The Graph, and so on.

- Discourse: This is the most common discussion platform for discussing governance proposals.

– Mirror: Using tokenized crowdfunding to fund new products. [name] comes after Medium and Substack. mirror.xyz is a platform that assists users in creating basic and easy-to-use content.

– Tally: The dashboard aids in the tracking of on-chain governance recommendations. Tally contains information about projects such as Gitcoin, Uniswap, Compound, Fei Protocol, and others.

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