Becoming Web3 Native Pt 6: DAOs

For decades, we’ve been taught that organizations need bosses, corporate hierarchies, and middle managers to function.

But what if there was another way?

Imagine a community-owned organization where:
✔️ Members vote on decisions, not executives.
✔️ Treasuries are transparent, with no shady accounting.
✔️ People contribute and get rewarded—without needing a job title.

That’s a DAO (Decentralized Autonomous Organization).

DAOs are Web3-native communities where people collaborate, make decisions, and manage funds without a central authority.

Think of a DAO like an internet-native co-op, but built on the blockchain.

What Is a DAO?

A DAO is an online community with a shared bank account.

Instead of being run by a CEO or board, DAOs are governed by smart contracts and token-based voting, meaning:
✔️ Decisions are made by members (not executives).
✔️ Funds are managed transparently (anyone can check the blockchain).
✔️ Participation is permissionless—if you hold tokens, you have a say.

In Web2, decisions happen behind closed doors. In Web3, DAOs put governance on-chain.

How DAOs Work (The Basics)

1️⃣ Membership & Governance

DAOs have different ways of onboarding members:

• Token-Based DAOs → Hold a governance token (e.g., UNI for Uniswap DAO) to vote on decisions.

• NFT-Based DAOs → Membership is granted via NFT ownership (e.g., Nouns DAO).

• Contribution-Based DAOs → No token required; join by actively contributing (e.g., BanklessDAO).

2️⃣ Proposals & Voting

Once inside a DAO, members can:

• Submit proposals (e.g., “We should allocate $10K to fund a new research project”).

• Discuss and refine proposals in community forums or Discords.

• Vote using on-chain governance tools like Snapshot, Tally, or Aragon.

3️⃣ Treasury Management

• DAOs control multi-signature (multi-sig) wallets to store and distribute treasury funds.

• Common treasury tools: Gnosis Safe, OpenZeppelin Defender.

• Some DAOs set up funding streams where contributors receive crypto payouts automatically.

Types of DAOs (Real-World Examples)

💰 Investment DAOs (Group Investing & Fund Management)

• Flamingo DAO → Invests in NFTs & digital assets.

• MetaCartel Ventures → Funds early-stage Web3 startups.

• Komorebi Collective → Focuses on funding women-led projects.

✅ Why it matters: Crowdsourced venture capital without traditional gatekeepers.

🎨 Creator & Culture DAOs (Supporting Artists & Builders)

• Friends With Benefits (FWB) → A social DAO for Web3 creators & culture.

• HerStory DAO → Funds & promotes Black women artists.

• Nouns DAO → Funds public goods (every NFT minted = treasury growth).

✅ Why it matters: Artists & creators are funded by the community, not corporations.

⚡ Service & Work DAOs (Freelancers & Bounties)

• Raid Guild → A collective of Web3 developers & designers.

• Vector DAO → A design agency where contributors earn in crypto.

• BanklessDAO → Educates people about DeFi & pays contributors in tokens.

✅ Why it matters: DAOs are replacing traditional agencies & job boards.

🏀 Social & Real-World DAOs (Communities with Collective Ownership)

• Krause House DAO → Raising funds to buy an NBA team.

• Cabin DAO → Building decentralized co-living communities.

• CityDAO → Owns a physical piece of land in Wyoming, governed by NFT holders.

✅ Why it matters: DAOs aren’t just digital—they’re funding real-world projects.

How to Join a DAO (Step-by-Step Guide)

📌 Step 1: Find a DAO That Matches Your Interests

• Forefront → DAO discovery hub (https://forefront.market)

• DeepDAO → Analytics & rankings of DAOs (https://deepdao.io)

• DAO Central → Community for discovering new DAOs

📌 Step 2: Join the DAO’s Discord & Start Observing

• Most DAOs organize on Discord (like their version of an office).

• Lurk, read announcements, see what’s happening.

📌 Step 3: Get a Governance Token (If Needed)

• Some DAOs require buying a token to participate in votes.

• Others let you earn tokens by contributing.

📌 Step 4: Participate in Proposals & Votes

• Proposals are discussed in Snapshot, Tally, or Aragon.

• Members vote with their governance tokens.

NOTE: These tools are used for DAO governance, not for chatting. Most DAOs use Discord or Discourse for discussion, and Snapshot, Tally, or Aragon for voting & execution.

📌 Step 5: Contribute & Earn in the DAO

• Some DAOs offer bounties (small paid tasks).

• Others have grants for building projects.

🎉 Congrats! You’re now part of a Web3-native organization.

How DAOs Are Different from Web2 Organizations

In DAOs, power belongs to the contributors, not executives.

Challenges & Limitations of DAOs

While DAOs are exciting, they’re not perfect. Here are some major challenges:

⚠️ Coordination Issues → DAOs can be slow and messy without clear leadership.
⚠️ Voting Power Disparity → Some DAOs have "whales" who own large amounts of tokens, giving them outsized influence.
⚠️ Legal Uncertainty → Most countries don’t have clear regulations for DAOs, making them risky in some jurisdictions.
⚠️ Security Risks → If a DAO’s treasury is hacked, there’s often no recourse.

TL;DR: Why DAOs Matter

✔️ Decentralized governance—no CEOs, just collective decision-making.
✔️ Transparent treasuries—anyone can see how funds are used.
✔️ Permissionless participation—anyone can contribute and earn.
✔️ Global collaboration—work with people worldwide, instantly.

Web3 isn’t just about investing—it’s about building. DAOs are how communities do it together.

🚀 Action Step: Explore a DAO This Week

✅ Join a DAO Discord and observe how decisions are made.
✅ Read a proposal on Snapshot and see how governance works.
✅ Look for bounties or projects you can contribute to.

I you want to learn more about DAOs,see our expanded articles from Vol8: The DAO 101 Edition

Ready to set up your Web3 wallet? Hopefully this guide will both encourage you and make the process simple. Always feel free to contact us with your questions.

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