Why DAOs?

What are DAOs?#

DAO stands for “Decentralized Autonomous Organization.” Because of the “organization” part, the term represents a group of people coming together to achieve a common purpose or goal. Unlike traditional organizations, the DAO is decentralized and software is used to coordinate DAO members toward the common purpose or goal autonomously.

To enable the organisation of DAO members in a decentralised and autonomous manner, most DAOs have the following characteristics:

  • Fluid Membership: Members can leave & join DAOs any time
  • Voting / Decision Process: Proposals & voting help DAO members decide collectively on all types of actions.
  • Shared Treasury: Community funds & assets (e.g. NFTs) are held by the DAO and controlled cohes

Why DAOs?#

Unlike traditional organisations that are centralised, opaque and rigid, we believe that DAOs represent a better way for human coordination moving forward.

In place of rigid power structures and opaque decision making processes, DAOs typically represent fluid membership, voting-based decision making and transparency in information (e.g. shares ownership, treasury).

DAOs rely on softwares and social processes to help manage membership, decision making, treasury that fits the unique needs of their community. For instance, if you are a community of builders or artists, you can create a DAO where community members earn shares by proving or doing their work for the community. If your community does investments or collectibles, you can enable community members to offer NFT tributes or funds for shares.

As decentralisation, inclusivity and collaboration flows through how DAOs typically operate, this creates an alignment of incentives and prevents centralisation of power that plagues more traditional organizations. In the long run, regardless what your DAO aspires to do, you will be able to create a more inclusive, diverse and anti-fragile organisation to achieve that.

For a more in-depth article on why people are building DAOs, check out this article

What can DAOs be used for?#

Ever since the inception of DAOhaus, there have been hundreds of DAOs summoned for different causes, from collecting and fractionalising NFTs to creating decentralised investment funds. As long as your community has a shared purpose, you can and should summon a DAO.

To start, DAOs are commonly summoned for the following purposes:

  1. Grants: MolochDAO
  2. Clubs: Monster Maps Cartographers' Guild & Artists Guild
  3. Ventures: MetaCartel Ventures
  4. Guilds: Raid Guild, LexDAO, YAPDAO
  5. Product: HausDAO

Next Steps#

Ready to start summoning your DAO? Here are some first steps to get started.

  1. Read more about DAOhaus features to know what DAOhaus offers
  2. Read the Tutorial on Summoning your first DAO
  3. Understand Best Practices from other DAOs