Ultimate DAOs FAQ

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December 22nd, 2021

There is a lot of content out there on DAOs. This is my attempt at creating a beginner-friendly FAQ page, inspired by the most common questions I’ve had and heard. I hope it’s helpful!

List of Questions

  1. What is a DAO?
  2. How many DAOs are out there?
  3. What types of DAOs are there?
  4. What are examples of DAOs?
  5. What is the point of DAOs?
  6. Why join a DAO?
  7. How do I get involved in a DAO?

FAQs

  1. What is a DAO?
    1. There are multiple definitions. Some say the simplest form of a DAO is “group chat with a shared bank account.” On the other end of the spectrum, the ideal “strict” form of a DAO is “an entity that lives on the internet and exists autonomously, but also relies on hiring individuals to perform certain tasks that the automation itself cannot do” (Ethereum founder Vitalik).
    2. Often, a DAO will involve:
      1. A group chat
      2. Treasury
      3. Token
      4. Governance (decisions made via voting)
      5. On-chain cash flow (e.g. NFT drops)
  2. How many DAOs are out there?
    1. It depends on the definition… Some sources say < 200, others say a few thousand.
    2. Consensys reported that in Sept. 2021, the top 20 DAOs held $14Bn of digital assets!
  3. What types of DAOs are there?
    1. There are social DAOs (like a digital country club where tokenholders are members who have access to events), protocol DAOs (tied with specific DeFi protocols), investment DAOs (focused on making investments), media DAOs (focused on producing content), collector DAOs (pooling funds to buy NFTs together) and more.
  4. What are examples of DAOs?
    1. Uniswap – the largest decentralized exchange on Ethereum
    2. PleasrDAO – they pool funds to purchase collectible items such as NFTs, real life artwork, and music. They famously purchased the one-of-a-kind album by the Wu Tang Clan for $4M in July 2021
    3. Friends with Benefits – a digital social club with events
  5. What is the point of DAOs?
    1. One argument is that DAOs are fundamentally mission driven, resulting in participants having a greater sense of fulfillment and meaning.
    2. The idea of ownership is core to DAOs (i.e. every member owns a piece of the DAO via the DAO’s token much like someone might own equity in a traditional LLC) hence members have aligned incentives to make the DAO better – “ownership fuels empowerment.”
    3. Another argument is that DAOs are less susceptible to human corruption as actions are executed by smart contracts (of course, many DAOs are not at this level of automation).
  6. Why join a DAO?
    1. It’s flexible (you can contribute from anywhere, at any time): maybe you want to work remotely or you want to supplement your day job with other types of work or you want to meet other people interested in similar values/activities.
    2. It’s often mission driven, you can find a community that aligns with your values and make new friendships.
    3. Members are incentive aligned and all share in the upside (and potential “failures”) of the DAO.
  7. How do I get involved in a DAO?
    1. Explore different discords
      1. There are some DAO directories like this one
      2. Ask friends what DAOs they’re involved in
    2. Join and “lurk” in discords (get a sense of what they do, the culture/”vibes”)
      1. Participate in any of the onboarding activities they have
      2. Check out the docs/any writing they have
      3. Attend a meeting
    3. If you want, try contributing!
      1. Often there’s a “contributor form” you can fill out to get plugged in. Otherwise, you can ask the #general chat or dm the core contributors and ask how you can help (or suggest your own ideas!)

Lmk if there are other FAQs you think I should add!

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