A New Form of Organizations for a New Society: Token and NFT DAO
The Next Wave of Governance Models Made for Your Tribe and the Crowd
Up until recently organizations and entities were driven by laws, often complex regulatory and administrative processes. Decentralized Autonomous Organizations, better known as DAOs, are changing the way people organize, vote, purchase tokens, NFTs, or support a single purpose. They sit on top of the blockchain infrastructure and live in a totally decentralized environment that provides them the resiliency and the strength that so many traditional organizations would like to have.
Welcome to the GameStop era, the era of Decentralized Finance — Defi
In January 2021, millions of amateur traders took on Wall Street's most sophisticated investors. While the hedge funds had been shorting GameStop’s shares, the retail investors — online traders, Reddit fans, small brokers, and others — have been buying and pushing the other way. This battle caused GameStop’s market value to increase to over $24 billion from $2 billion in a matter of days. The market value is still floating around $14 billion today (October 31st, 2021).
I think this event marked the beginning of the Defi era. At the same time, the future of work was being accelerated with the global COVID crisis. While offices are no more the place where things get done, the whole economy is being forced to reinvent itself.
DAOs are redefining the way our communities can gather remotely for a Common Purpose or Benefit
DAOs are shaking the status quo and bringing a tidal wave of innovations in the old governance models we are used to. I have been researching to understand what it meant to build an NFT DAO for my Cryptopunk. Another option is how could I build a DAO to enable my friends and I to purchase tokens — stocks collectively. A third option would be how my co-workers and I could build a DAO for Nodle in order to increase participation of our crowd of fans into our Polkadot Parachain auction.
Some solutions and platforms to create your DAO
The most advanced solution I found is the Aragon DAO platform. You can easily create your DAO and add a whole set of specific applications depending on what you want your org to achieve to attract contributions, pool transparency, or govern the org. They even have an Aragon Agent that can interact directly with other smart contracts. The example they use mentions the DAO voting on lending DAI on Compound without the need for an intermediary.
I also checked DAOstack from Alchemy, at first sight, the UI was very simple and easy to use. After digging into the solution and accessing the Gitbook where some of the documentation was offered to be reviewed, I realized the project is still in its planning stage but it looked promising.
Another alternative that I found interesting is Daohaus, like the others you can think of it as Governance Operating System. They have supported some interesting DAOs around investments in the Web3 ecosystem.
When you create a DAO the first things you have to do is to first agree on a name. The you need to find a common purpose, add the first members of your DAO using their public wallet addresses and then decide on a number of tokens to be issued for your DAO together with the ticker you want to have. Each member you add to your DAO will receive your DAO tokens.
NFT DAOs for selling your NFT
If you are just looking to sell fractions of your NFT, I recommend Fractional since it is dedicated to fractionalizing your NFT. The UI is simple and enables you to do fractionalize an NFT you already own using ERC-20 or ERC-1155 easily. There are a few things you need to be aware of when you decide to fractionalize your NFT. After the first sale, you are no longer a 100% owner of that NFT and it may be difficult for you to sell the whole if you have difficulties reaching out and agreeing with one of your buyers of a fraction of it.
A DAO for your Polkadot or Kusama Parachain Crowdloan
The easiest way to set up a DAO for a Parachain Crowdloan — with the purpose of building treasury for one of the auctions — is to set up a multisignature wallet on Polkadot. You can limit its capabilities to only enable signature holders to vote on funding a crowd loan auction or refunding its funders. It is what Acala Network did for preparing its participation to Kusama and Polkadot Parachains auctions. In that case it is recommended to use a set of signers that can be trusted by the community.
DAOs will enable communities and tribes to generate enough return to represent a large part of people’s sources of revenue soon. They will free people’s time while improving efficiencies. They will play an essential role in what I call the infrastructure for abundance.
The power of the crowds and how they can enable healthier economies with more competition
Crowds can quickly provide your DAO the strength of an already scaled traditional organization. Capitalism reinforces corporations with an economy of scale; this has unfortunaltely lead to create large incumbants that are hard to displace and that have destroyed healthy competition. DAOs flexibility enable an easy scaling of your org and can quickly give it the size to compete with any other large existing corporation.
The Gamestop story is the proof of it and DAOs provide now the tool and governance for any tribe, group of individuals, or crowd to organize themselves efficiently in a total decentralized manner.
If you are interested in the Nodle Parachain Crowdloan auction, you can start and pre-register here: https://parachain.nodle.com
