“What’s a DAO?” — A 5-Minute Primer for Normal People
It feels weird writing about DAOs. The concept is simple but at the same time, the application of the concept is complex.
DAO stands for decentralized autonomous organization. Simply put, DAOs are communities of people who share the same interests, work on the same projects or in similar industries, or hold the same beliefs. The company you work for, the public corporation you hold stock in — hell, even your church and the country you live in — could all be DAOs!
The difference between DAOs and these other organizations is that DAOs are built on a blockchain. Just as the Boy Scouts have handbooks, corporations and churches have governance laws, and countries have governments and constitutions, DAOs have smart contracts that are coded on the blockchain. (As of this writing, Ethereum is the predominant blockchain that most DAOs are built on.)
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How do DAOs operate?
Let’s use a few more analogies of existing communities to help us understand how DAOs work.
Every mature organization needs a way to give or revoke access. Think of a fancy-pants country club where you need to buy and own shares or have a certain postal code to get to hit a ball across the court or a fairway.
Another thing mature organizations need is a way to make decisions as a group — governance. This time, think of annual general meetings in a company where the shareholders vote on the new chairman of the board.
Finally, communities need a way to showcase how much a member contributes to the group — social. On forums like Reddit, a post gets upvotes for clout or, if the contributor made an especially insighful point, other members in the community can bestow Reddit Gold upon the brainy user.
Thanks to blockchains like Ethereum, DAOs can code 1 or more tokens to fulfill all 3 operations. For most communities, a single ERC20 token can fulfill all 3 functions:
Having a single token in your virtual wallet grants you access to the Discord server — the communications platform where most DAOs live
Holding the DAO’s token gives you voting rights to hold sway over DAO decisions (of course, generally speaking, the more tokens you have, the more sway you hold)
Completing DAO projects that need to get done allow you to collect more tokens, just like completing quests and collecting gold in a video game. Other DAO members will then be able to tell if you’re a DAO veteran or newbie (and treat you accordingly 😈).
How to join a DAO
Unlike joining a new company, joining a DAO is a low-risk, high reward way to get your feet wet in the web3 space. It’s more like volunteering at a non-profit and then eventually, getting asked to work there full-time (although in DAOs, even “noobs”, “volunteers”, and “interns” get compensated for their contributions 😉).
Joining a DAO is literally about entering the community — usually by joining a Discord server — learning what it’s all about, then contributing your time and sweat equity to a project in the cause.
You can build context and find your way in the DAO by…
Reading the DAO’s docs (usually found in their website, #welcome, or #start-here channel)
Joining their community calls (a DAO might have a shared Google calendar so you can look up when that happens), or
Messaging someone who seems to know what they’re talking about in a channel
To get the tokens needed to grant you access to all the Discord channels or governance rights, you can complete projects as an outsider (a.k.a “complete bounties” in DAO-speak) to earn your way in. You could buy your way in by swapping ETH or another cryptocurrency for the DAO’s token on Uniswap.
These onboarding processes vary from DAO to DAO, but generally, a DAO’s #start-here or #welcome channel on Discord is your best first stop.
I mentioned earlier that DAOs can have all sorts of purposes or shared ideas. So I polled Twitter for some beginner-friendly DAOs whose projects are simple to wrap one’s head around and contribute to, especially if this is all super new to you:
CabinDAO – I own ₡ABIN token and am a contributor to this DAO! We’re looking to build cabins IRL and a community in digital for web3 workers. In fact, I’m writing this post from the first cabin in Austin, Texas. If you join the Discord, please say hi!
Forefront – A media company focused on web3
KrauseHause – A community that wants to buy an NBA team together 🏀
JuntoDAO — A community to share things. Like a community library but for all the things.
See you in the DAOs!