Decentralized Autonomous Organisations (DAOs) are becoming more commonplace in 2022. As these membership models expand, we’re rounding up the best examples of DAOs that are inspiring people the world over to get involved in these next-gen endeavors.
What You Need to Know About DAOs
DAOs are decentralized business entities. They differ in terms of structure and management since the ownership and decision-making are shared between the members, instead of having a centralized group in charge. When it comes to decision-making, proposals are made and voting occurs to ensure that all have a vote in the treasury. The aim of this system is that there is transparency and decentralization.
DAOs don’t just represent a new way for businesses to be structured and governed, but they also have new ways of operating. Smart contracts (digital handshakes) are used, which follow the theme of decentralization. Smart contracts remove the middle man from the process and fulfill transactions once the necessary conditions have been met.
There are various types of DAOs that can be created. Some examples include charity initiatives, networks geared towards a specific goal with collective buying power, or private ventures that are based on enthusiasts or investors. It can be surmised as follows: investment DAOs, grant DAOs, social DAOs, and protocol DAOs.
There are two primary ways to create a DAO membership. The first is token-based, where members participate in a DAO by trading decentralized tokens. As such, many NFTs on the market offer exclusive memberships as a benefit. The other way is share-based memberships, whereby members submit proposals for services, contributions, or tokens to earn shares in the collective.
Membership is binding by means of smart contracts. Members agree to follow certain rules. If the rules are broken, depending on the specific clause, funds can be locked to ensure that the rules are indeed followed. DAOs have a repository where a digital currency cache is stored. It begins with a smart contract, followed by fund-raising, and finally release.
The Best Examples of 2022 DAOs
Here's a look at some of the most prominent DAOs in 2022.
Big Green DAO
As a self-proclaimed philanthropic ‘experiment,’ the Big Green DAO is making waves by helping schools, families, and communities to grow their own food. The goal is to improve nutrition security and mental health, as well as cultivate a deeper appreciation for the environment.
This DAO began with a $1 million fund. The members elected 5 entities to support in the first phase. Each beneficiary earns membership along with a great, which increases the number of votes for future projects.
LinksDAO is a community that has come together to build or buy a top 100 golf course in the USA, with the purpose of ultimately creating the best possible golf club membership experience. LinksDAO has launched a series of membership 9,000 NFTs with two main categories - Leisure and Global. These sold out within 48 hours, with LinksDAO generating funds of over $10million.
Decentraland DAOs are virtual land parcels that act as a homeowners association and decentralized city planning committee.
PleasrDAO has collected funds from individual artists and collectors to acquire culturally relevant digital art. It purchases an animated Unisawp ad by artist Pplpeasr for $525,000 and has since expanded to include works from other artists. They also purchased the NFT for the Wu-Tang Clan album cover for $4 million, and $6.3 million for the Ross Ulbricht Genesis Collection.
This DAO project explores crypto trends by onboarding non-crypto assets. Maker DAO members use tokenized versions of invoices, real estate, and short-term trade receivables.
Mirror is a content hub, where members can redeem a WRITE token in exchange for publishing a blog post that will be hosted on Mirror.
Friends with Benefits DAO
FWB is a members club that is focused on finding the answers to questions about how Web3 can improve existing social networks and platforms. Tokens are bought, and the more tokens you have, the more you can do. There are also community events and a FWB Cities initiative that is based on having a transparent computer program.
58 music lovers have formed a community of NFT owners. The group poos funds to make investments and to sponsor new artworks and music. This DAO purchased EulerBeats Enigma NFTs, which are rare audio files. They have even collaborated with Snoop Dogg and artist Nyan Cat to produce the “Nyan Dogg” NFT.
Dash is a DAO project focused on driving DeFi development. It allows for faster transactions of decentralized digital payments. Its utility token, DASH has grown significantly, with over 10 million tokens issued to date.
The Final Word on DAOs
Put simply, DAOs are associations based on crypto projects or collective financial goals. They are also becoming a means of creating exclusive clubs for token holders. It forms part of the bigger picture, where moves are being made to decentralize traditional models and new technology like blockchain and smart contracts come into play. As DeFi continues to grow, so too has the interest in DAOs. What is your favorite DAO project for 2022?
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This article is a round-up of DAOs and is not intended to provide financial advice.