In my previous article, we discussed the standard structure of a DAO- Governance, Tokenomics, and Smart Contracts; what a DAO is, how it functions, and the solutions it provides to ecosystems and autonomous communities.
The innovation of different Defi protocols, ecosystems and other offsprings of blockchain technology (Web3, NFTs, GameFi, etc.) raised the need for distributed control, equity ownership, and permissionless participation.
Through on-chain governance and smart contracts, DAOs provide the structure needed to meet these needs and the scalability to allow more users into the world of decentralization with minimum efforts and maximum results.
DAOs provide the framework of what a decentralized organization looks like.
Regardless of the structural similarities, however, each DAOβs purpose and goal differ. Unlike most assumptions, not every DAO builds an NFT project or launches a new crypto coin.
There are different DAO types. DAOs are categorized based on the purpose each serves. Whether you are creating a new Defi protocol, launching an NFT or GameFi project, or building a Web3 product, it is important to know the type of DAO you need to support and scale what you are building.
In this article, we will explore the different types of DAOs needed for each project.
1. Social DAOs
Social DAOs change the status quo by focusing on social capital instead of financial capital, like other DAOs and investment firms.
Social DAOs, also known as Creator DAOs, are community-driven, with the primary focus on interlacing creatives, artists, builders, etc. Strangers become friends and coworkers as they work towards the mutual objectives and goals of the DAO.
An excellent example of a social DAO is the Board Ape Yacht Club. Since its launch on April 23rd, 2021, the club gained social dominance, pulling a crowd of high-society celebrities, each of them, a BAYC holder.
Participation and membership of top celebrities snowballed the social capital of this DAO, and thus, the utility value of its digital collectibles.
2. Collector DAOs
Members of collector DAOs focus on pooling funds into the DAOβs treasury to mint and collect valuable, rare NFTs. Members share the gains and proceeds according to the share of their initial investment.
With collective collaboration, NFT collectors can purchase and own NFTs that would have been too expensive or risky for individual purchases. This gives investors a non-risky exposure to expensive NFTs.
Collector DAOs are also known as NFT DAOs. Many collector DAOs gained popularity through the dominance of NFTs. A remarkable example of a collector DAO is The Constitution DAO.
Members of The Constitution DAO raised $47 million worth of Ethereum to purchase the original copy of the Constitution of the United States at an auction.
Though they lost the bid to a higher bidder, their concept paved the way for more successful collector DAOs like Flamingo, Gremlins, etc.
3. Grant DAOs
Members of Grant DAOs donate funds to sponsor products of Web3 ecosystems or Defi protocols. Members vote on the allocation and distribution of collated funds.
An example of a grant DAO is the Aave Grant DAO. It is a community-led DAO that pools funds to support projects that facilitate the development of the Aave Protocol.
Some other DAOs award grants to build dApps and products on the Web3 ecosystem, community-centered initiatives, etc.
4. Media DAOs
Media DAOs change the narrative of modern social media by ceding control of content to the owners and consumers, instead of a centralized authority. They achieve this by creating community-driven content.
Here, creators earn equity through their content by owning native tokens of the DAO. They not only gain financial value from these tokens but also gain voting rights for community governance through governance tokens.
An example of media DAOs is Bankless DAO. The goal of Bankless DAO is to promulgate the bankless culture and ensure mass adoption through awareness creation.
5. Investment DAOs
Also known as Venture DAOs, they pool funds to invest in and fund startups building Web3 products, Defi protocols, and blockchain projects at an early stage.
Investment DAOs provide a platform for angel investors and venture capitalists to pool funds to sponsor or finance Web3 and Defi projects. This provides a low-entry barrier and low-risk investment choice to such investors, as well as a plus to their portfolios, as they now own assets beyond traditional finance.
An excellent example of an investment DAO is MetaCartel Ventures (MCV). It is a profit-based DAO built to invest in decentralized applications (dApps) at an early stage.
6. DAO Operating Systems
These are the operating systems on which DAOs are created. They provide the structure and resources for communities to create their DAOs. They simplify the DAO creation process for tech novices by providing templates to create and launch their DAOs.
A great example of this is the DaoHaus, a frontend software. With various add-ons, DaoHaus incorporates activities of the DAO with discussion platforms, such as Discord and Discourse.
The goal of this is to enhance DAO-focused discussions and open participation for members of the DAO.
The diversification of the different DAO types proves the unending utility and already-existing value of DAOs.
Further iterations and additions to the types of DAOs paint a promising future for the concept of decentralization.
My predictions are that in a few years to come, there would be no need for centralized authorities or protected participation, as DAO will be the common structure of governance, structure, and participation.
Need a marketer or content writer for your Web3 projects? Shoot me an email via munachimsoolehi@gmail.com letβs get to work!