DAO Roadmap When should crypto projects start DAO?

When creating a DAO is a matter to consider now or after.

Go to the DAO of the future

To be fair, DAOs will be the organization of the future. The concepts developed by the Decentralized Autonomous Organization (DAO) have been around for a long time, and it's time to put them into something bigger.

The pervasiveness of COVID-19 has allowed us to see a lot of things the tech world already knows, like how divisions can work together effectively. Compound, Gitcoin and a few others have seen its ability to unite groups and communities and make decisions.

Does this mean that every startup should create a DAO?

It's not perfect.

First, not all businesses are eligible for DAOs (like the storage store on Shopify). Although necessary, there is still a lot of work to be done before the first DAO elections can take place.

DAO is a community. The shared vision is created in the community and the goal is designed to achieve that vision. For example, the We Run Uptown community, created by Hector Espinal, has a common goal: "To encourage New Yorkers to build a community network to become a better and more inclusive society. The joy of running."

But he didn't do it to play his neighbors in Washington Heights (northern Manhattan), he posted on Facebook: "Wait for me at 168th Street and Broadway. Bridge."

The people involved with Hector know exactly what they will be doing (running) and with whom (environment). But everyone has their own reasons for doing so, but they all agree. It's a health issue.

The same goes for DAOs. Starting a project is hard until you really understand what it is, how it works, why, and whether it will appeal to people.

In addition to a sense of community, DAOs need governance and support. The community will develop this process later, but a framework must first be established. Indeed, the management and promotion of communication models visualizes, explains the practices of DAOs and ultimately becomes the primary reason people participate.

So when should you start building your DAO? Jesse Walden at 16z gives some answers to this.

- Can I have decentralization

Walden thinks crypto startups should be decentralized. It becomes hard and it is a guarantee of long-term health. "

Creating communities of untested ideas often leads people to neglect the most important task: experimentation. To avoid this error, Walden recommends the following three steps:

Find suitable products

Building a strong community

Proceed to Community Membership

Find suitable products

Things move fast and information changes fast. You must work in sprint mode. Define a problem, create a solution and test it. The core team can modify regularly and repeat the above steps until the product meets the needs of the industry.

Concentration and rapid repetition are essential. Optimizing for speed requires making features smaller and more flexible. Walden said no decision should be made on the cast at this point.

Community involvement

When you see your business goals, you will find that you are solving a real problem for many people. Even if the product is still being processed, we will still receive the request from users. Some users even ask about features. Now is the time to start building your community.

If establishing a DAO is not in your plan, community development may be a good idea for two main reasons.

Gain customer understanding to help you personalize your product.

Keep customers in touch. Indeed, it is very easy for consumers to offer products that they have not encountered by the community.

In Web2, companies create communities to profit from it. For example, Coda, the documentation app I used to write these sentences, has an online workspace where people can share designs, improve features, and share experiences. Community members can benefit from these interactions, but the biggest benefit is with Coda. Mining forums for case studies, comments and suggestions. In return, users pay for products that help them create.

It may seem like an effort, but it's true. Community participation is voluntary, but it is not necessary to take this route.

If Coda decides to use the DAO method, it can do the following:

Ask community members to talk about the production.

Establish community management and support.

Track return value by rewarding members for their involvement (e.g. designing, creating operations) and more.

Introduce the token mechanism to realize the valuable exchange of people in the community.

Community members

Each effort on the first two stages is shared one stage at a time. The team regained all rights for the community. From now on, token holders will make all decisions regarding the future of their organization.

Management and support are the most important issues, ranging from advocacy to sensitization to the work of the DAO. It is ultimately up to the community to improve governance standards and improve processes and procedures so that DAO can do it all, no matter how much work was done in the previous stages.

In addition to day-to-day operations, there is a lot of competition from existing business owners, employees, taxes, and business registrations. Most states and countries do not recognize DAOs as legal entities. Want to register as an LLC? Or do you want to register as a DAO in Wyoming? Depending on your choice, what are the next steps regarding deductible payments and compliance with labor law?

Currently, I don't have all the answers to the above questions. And to be honest, I don't think anyone knows. As the example below shows, coming up with a reasonable design can take many years, usually more than three years.

How other operations passed to DAOs

Gitcoins

In 2017, Scott Moore and Kevin Owocki created Gitcoin, a platform to fund the development of open source products for Web3. Earlier this year, Owocki explained that many expansions weren't made for the simple reason of lack of initial funding. So, to solve this problem, Moore and Owocki launched this grant to help developers open source code for Web3.

Gitcoin became a DAO leader in May 2021, when it announced the Management Token (GTC). Over the past four years, Owocki and Moore have focused on the importance of identifying problems, developing solutions, and building communities of developers and sponsors. After resolving all the above issues, the team began to establish a management framework for the communities and a way to transfer responsibility to the DAO. The announcement of GTC tokens is the end of all the above efforts.

AW

In 2017, Stani Kulechov acquired ETHLend as a decentralized peer-to-peer lending platform.

A year later, Kulechov and his team transformed their business model into a financial services pool and renamed it AAVE (“Finnish “spirit”).

It was not until 2020 that AAVE started its activities as a DAO.

What did Kulechov and his team do in three years? First, they improve their business model, rebrand and validate the suitability of their products. After AAVE was supervised, they decided to become DAO.

Ua Dao

MakerDAO was established in 2015 as a founding foundation. Rune Christensen announced his vision to create a digital security device (e-Dollar) to support the exchange rate of the Ethereum network. The problem Christensen is trying to solve is one of the problems we still face today. Critical crypto assets are increasingly becoming valuable tools for trading today. The world of crypto assets requires secure digital assets.

Over the next few years, Christensen abandoned the Development Agency and developed a limited edition of the DAI digital security device, laying the foundation for the development of DAOs. You can read the whole process here.

Like many other DAOs, MakerDAO has achieved significant success in converting DAOs through slow decisions. However, this method is not a panacea.

When progressive decentralization fails

A light distribution is better for a layer 2 application. It is mainly based on Ethereum and uses smart contracts. Most DeFi and Web3 applications fall into this category. However, some business models require distribution from the start.

Layer 1 Protocol

Basically, projects like Ethereum, Solana, and Polkadot need a community of participants from the start. Their true goal is to provide solutions through decentralized blockchain technology. They operate in a decentralized environment from the ground up.

If Ethereum's founder had full authority to decide, it would not have been successful and would not have been a public trust. Another Amazon or Airbnb, a network with restrictions within the intermediary.

Value of blockchain networks in decentralization. So you have to optimize it from scratch.

Social clubs and budgets

Without Web3, LAO would have been a VC native and PleasrDAO would not have existed.

LAO's success is found in the community of people involved in crypto operations. In venture capital investments, LAO will have a general partner (GP) who will raise funds from a non-disclosure liability (LP) to generate funds, and the partner is responsible for jobs for investments and returns on this investment.

This model works when the partner is not responsible for the day-to-day performance of the account. Many LPs use this method because there is no need to pause as long as the funds can deliver on the promise and handle the same risk.

However, there are LPs who care about more than money in their bank accounts, and decentralized organizations like LAO and Meta Cartel are good.

The use of the LAO is inseparable from the DAO. From conception, it is based on the collaboration of people in a variety of roles, including Entrepreneur, Bole, Trainer and Designer. Together they created this project that will open the future.

The same goes for PleasrDAO. Bring a group with a common goal to create personal artwork. Most authors' organizations are available offline, but seem to have a very large base and very few members. Thanks to a tweet, PleasrDAO is now merged and most members are anonymous with some of the best NFT arts in the world without having to establish a business base.

Plans like LAO and Ethereum didn't benefit from the distribution's routine approach, but they weren't fully integrated in the first place. They also need a small team of developers to be successful.

In Infinite Machines, Camila Russo describes how Vitalik Buterin is working on a project with Gavin Wood, Charles Hoskinson and Anthony Di Iorio. Although their roles are different, they all come together to make important decisions regarding businesses, legal registration, token offerings, and more.

According to Russo, Ethereum did not go well in the first place. Conflicts and resistance to power also occur. Most early builders left the project due to inconsistencies. Even if the founders get along well, the basics of starting a business can still be difficult. And try to get DAO to make it harder.

Many people in the cryptocurrency world know the story of DAO. A few weeks after the announcement, a bug in the smart contract caused hackers to withdraw millions of dollars in ETH tokens. Quinn DuPont researcher Quinn DuPont provides an in-depth analysis of the issues DAOs are beginning to face, saying: "We use our existing relationship to discuss – the management vision respects the future where cultural norms can be broken and transformed into a more traditional one, and all of this is possible without a single set of rules.”

Therefore, it is important to be clear about the process and timeline for the transition of power to a community-centric management model, and to have a clear understanding of the integration process. The community can lead the battle . you.