More than ten years ago, Satoshi Nakamoto, the creator of Bitcoin (BTC), released the BTC white paper, suggesting the idea of a decentralized, peer-to-peer (P2P) system. Although the original purpose of BTC was for P2P transactions, the technology has evolved, and users can now conduct secure transactions while preserving the accuracy and security of their data.
In theory, DAOs do not function like individual applications but instead resemble a company without a traditional physical setup. The concept behind DAOs is that they operate independently, with users having a say in certain processes through voting. Unlike typical transactional programs, DAOs are not developed or managed by profit-making companies. Instead, they are “owned” by the users.
How does a DAO work?
The DAO’s core team of community members use smart contracts to establish the rules governing its operations. These smart contracts serve as the basis for the DAO’s functioning and are transparent, verifiable, and publicly auditable. This ensures that all potential members can understand how the protocol will operate at any given time.
In this process, a DAO treasury is financed by creating tokens and distributing them to token holders who can then vote on governance decisions. The DAO is launched only after the funding round ends. It’s worth mentioning that altering the smart contract codes requires agreement from the membership through a voting process.
Top 10 DAO Governance Tools
Colony
Colony is a platform that enables the creation and management of DAOs without any coding. With the help of its no-code toolkit, even beginners can create and deploy a fully-functional DAO effortlessly. It was founded by Jack du Rose and Aron Fischer. So, whether you want to build a simplistic organization or a more intricate structure, Colony makes it possible to create a functional DAO quickly and easily.
The Colony platform offers several features that simplify the process of creating and customizing a DAO. Users have access to a diverse set of templates that come with pre-configured settings tailored to different organization types, ranging from simple DAOs to more intricate structures with several sub-DAOs.
With Colony, you can use management tools to oversee membership, proposals, and voting within your DAO. You can smoothly integrate your token, handle its sale, and supervise the governance of your DAO. These tools enable seamless management and monitoring of a DAO, ensuring it runs smoothly and efficiently.
Aragon
In 2017, Luis Cuende and Jorge Izquierdo created Aragon – one of the earliest and most frequently used DAO builders for creating communities and economies. Aragon comprises various sub-DAOs to promote maximum efficiency. Aragon is a ground-breaking platform that facilitates on-chain governance. Users can create a DAO with ease using Aragon, without requiring any technical know-how. The platform offers various customizable templates for different DAO categories, such as nonprofits, social groups, and for-profit ventures.
Aragon offers various useful tools for managing token allocations, coordinating DAOs, setting up legal frameworks, and minting tools. It has a treasury management system that helps DAOs manage their finances. Aragon also includes a budgeting system for creating and managing budgets and an accounting system to track financial transactions and provide transparent reporting for all DAO members.
DAOhaus
DAOhaus is a platform that enables the launch and operation of DAOs without requiring coding skills, utilizing the open source code Moloch. Its features include the ability to propose, vote on, and carry out proposals, keep track of various treasuries or “Vaults,” and see members listed by their share numbers and join dates. DAOs have employed DAOhaus software to raise over $50 million and distribute approximately $20 million.
Although it is smaller than Aragon, DAOhaus is also a DAO that can attract communities seeking an active role in improving the product and sharing the benefits. A unique feature of DAOhaus is its implementation of the Moloch DAO’s ‘rage quit’ mechanism, which enables members to leave the DAO with their share of resources if they disagree with the outcome of a vote. Aragon governance platform also offers this functionality.
Collab.Land
Collab.Land is a well-known DAO tool that automates community management by selecting members based on token ownership. The platform works across multiple blockchains, including Ethereum, Solana, Polygon, Arbitrum, Optimism, Immutable X, Multichain, Avalanche, Polkadot, Kusama, Gnosis Chain, NEAR, Flow, Tezos, Ronin Network, and Moonbeam.
Collab.Land not only verifies that each potential member has the necessary token(s) to join and participate in a community initially but also conducts regular checks to ensure that members continuously meet the requirements. The platform has plans to launch a marketplace in the near future.
The platform has over 8 million wallet connections and supports 43,000 active communities on Discord and Telegram, making it ideal for community management and engagement.
Boardroom
Boardroom is a dashboard for managing DAOs that helps active members and stakeholders make quicker and better-informed decisions. It works with various blockchain networks, such as Ethereum, Arbitrum, Optimism, and Polygon, enabling users to engage in different projects, regardless of their network.
Boardroom offers a centralized location for important information that is typically spread out among multiple solutions. Users can access all necessary data from a single dashboard, simplifying the decision-making process. This is particularly beneficial for organizations with decentralized teams, as it streamlines tracking, voting, communication, and reporting workflows.
Its Governance API allows developers to access the data easily and is useful for those who want to create dApps or add Boardroom to their current workflows. There is a ‘Teams’ feature that helps to simplify tracking, voting, communication, and reporting workflows.
Tally
Tally is a powerful tool that helps DAOs govern better. It has a customizable payout system that can be used within and outside of a DAO. This system efficiently allows DAOs to distribute rewards and payments to their members, which incentivizes participation and contribution. The payout system can be customized per the DAO’s rules and criteria.
It has an on-chain governance feature that enables DAOs to carry out voting and decision-making processes easily. With this feature, DAOs can generate and manage proposals, vote on them, and monitor the outcomes in real-time.
With Tally, users can contribute to DAOs using their usernames (ENS) instead of addresses. This feature simplifies the contribution process and makes it more user-friendly, as users no longer need to remember and enter their addresses. This is crucial for encouraging growth and contributions in decentralized organizations.
XDAO
XDAO is a framework that allows you to easily build and manage decentralized autonomous organizations. With XDAO, you can create organizations of any size, from small investment pools to large venture funds and startups.
It offers various tools for managing and building communities. Also, it supports multiple chains, such as Arbitrum, Avalanche, BNB Chain, Ethereum, Optimism, and Polygon.
In addition, XDAO offers a wide range of tools that allow users to allocate funds to various parts of their organization, invest in DeFi using shared assets, purchase NFTs, participate in GameFi, engage in charitable activities, take part in IDOs and launchpads, manage family assets, and more.
Juicebox
Juicebox is a platform that helps people build and manage DAOs (Decentralized Autonomous Organizations) quickly and easily using Ethereum. One of its main features is creating custom token offerings for these DAOs. This means the DAOs can make and sell their own tokens to raise money and encourage people to get involved. Juicebox also has an interface that’s easy to navigate, which helps DAOs customize their tokens with things like vesting schedules and different ways to use them.
This platform not only enables DAOs to crowdfund but also provides a smooth way to develop a community for NFT projects. Well-known DAOs such as Constitution DAO and Assange DAO have utilized it.
Coordinape
Coordinape is a tool that helps DAOs manage rewards and allocations for contributors in a transparent and efficient way. It offers different tools and features that simplify the process of distributing rewards and guarantees that all contributors receive fair compensation for their work.
It simplifies and improves the way contributors are assigned and compensated in DAOs, bringing uniformity and productivity. By offering a user-friendly solution for funding contributors, this platform makes it easy for DAOs to manage their resources and fairly distribute their funds.
With that, it is a versatile tool that can adapt to a variety of DAOs seamlessly. It allows DAOs to fund a vault for specific tasks and distribute the budget among the contributors based on their contributions. Coordinape also enables a swift feedback system, which encourages continuous improvement and cultivates a sense of community and collaboration in the DAO.
DAOstack
DAOstack is a platform created in 2017 by Metan Field and Adam Levi. It offers a library of governance protocols and interfaces for the creation of scalable and effective DAOs. The goal is to enable collective and decentralized governance on a large scale.
DAOstack is a versatile platform that offers a complete set of tools and resources for building both simple and complex decentralized autonomous organizations (DAOs). From frontend and backend development tools to middleware solutions, DAOstack has everything you need to start and manage your DAO effectively.
Aside from its strong building features, DAOstack is also a beneficial tool for managing DAOs on a daily basis. It offers multiple governance protocols and interfaces that enable transparent and efficient management of voting, decision-making, and resource allocation processes. This can greatly benefit organizations that operate in dynamic and fast-paced environments, where quick and effective decision-making is necessary.
The Future of DAOs
Decentralized Autonomous Organizations (DAOs), once a futuristic concept, are now becoming a key part of the rapidly evolving blockchain landscape. Born from the ethos of blockchain’s decentralized and democratic ideal, DAOs have been revolutionizing how organizations operate. But what does the future hold for these digital, self-governing entities? Let’s explore.
DAOs are set to disrupt traditional organizational hierarchies by advocating for a more cooperative and egalitarian model. They are potentially reducing the need for centralized control and offering a more inclusive decision-making process where each member has a voice. We could see a significant rise in DAOs across various sectors, including finance, social media, arts, and public services.
Interoperability and Cross-Chain Collaborations
As blockchain technology evolves, interoperability is also becoming a crucial element for seamless user experience. DAOs will not be confined to a single blockchain; instead, we expect to see an increase in cross-chain collaborations. These would enable DAOs to interact with a variety of DeFi protocols, NFT platforms, and other DAOs across different networks, fostering a rich, interconnected ecosystem.
Social Impact and Sustainability
DAOs have a unique potential to drive social impact. More philanthropic DAOs could emerge, allowing people from all walks of life to contribute to causes they care about. These DAOs can ensure transparency and trust in charitable giving, a sector that often struggles with these issues.
In addition, DAOs could play a significant role in sustainability efforts. Green DAOs could incentivize eco-friendly practices, fund renewable energy projects, or participate in carbon offset programs, leveraging blockchain’s transparency to ensure accountability.
Regulation and Legal Recognition
While DAOs offer many exciting possibilities, they also face regulatory challenges. As the concept becomes more mainstream, lawmakers worldwide will need to address DAOs. Will DAOs receive legal recognition as autonomous entities? How will member liability be defined? Answering these questions is crucial for the maturation and acceptance of DAOs.
In the future, we may see the introduction of “DAO-friendly” regulations and jurisdictions, similar to what we’re currently witnessing with crypto-friendly countries. These legislative efforts would provide clarity and security, ultimately propelling the growth of DAOs.
Innovative DAO Governance
As DAOs evolve, so will their governance structures. We’ll likely witness the development of more sophisticated DAO governance models that strive for equitable representation while mitigating the risks of mob rule or voter apathy.
To aid this, advancements in DAO tooling will be critical. Innovative voting mechanisms, gasless transactions, off-chain voting options, and more user-friendly interfaces will make DAOs more accessible and efficient.
Conclusion
As we delve deeper into the era of decentralized governance, the importance of robust, secure, and efficient DAO governance tools cannot be overstated. The ten tools we’ve discussed in this article provide a comprehensive toolbox for anyone looking to establish their first DAO. They reflect the versatility and dynamism inherent in DAOs, empowering individuals and communities worldwide to create more democratic, transparent, and efficient organizations. Remember, while technology plays a significant role, the real power of DAOs lies in the people that form them – after all, decentralization is as much about social innovation as it is about technological advancement.
