Our lives are constantly becoming more and more intertwined with the digital world. Today, almost everyone is part of an online community. According to a survey by Meta, 77% of respondents said that the most important groups they're part of are virtual.
For a long time, online communities have been just platforms for people to share their thoughts, ideas, and opinions. Decentralized autonomous organizations (DAOs) are here to change that. DAOs enable new frontiers for social coordination and profitable engagements.
The DAO revolution is heating up. Reports show that DAOs collectively comprise more than a million members, and DAO treasuries hold more than $11 billion. This surge in membership and valuation calls for a robust and functional set of tools to manage DAOs and ensure they remain aligned with their fundamental values.
To help you get started with your DAO, we have compiled this guide to DAO tools that will enable you to build your decentralized future. Let’s dive in.
What Do DAO Ecosystems Look Like?
DAOs are member-owned, blockchain-based entities built to serve particular purposes.
DAOs represent a dynamic model of governance that operates on the principles of decentralization and autonomy. DAOs are built on a distributed ledger technology framework, meaning no centralized authority claims undue influence in their management. Instead, members of a DAO hold the power to make decisions.
Smart contracts are the technological masterpieces at the core of DAOs. Smart contracts are unique pieces of code on a blockchain that execute an action when certain predetermined conditions are met. For instance, a smart contract can be programmed to release funds to an account when 50% of members vote for a proposal.
The autonomous nature of DAOs opens up new ways for people with a common mission to collaborate. The number of DAO use cases continues to grow by the day. Whether pooling funds together to purchase an NFT or managing the value of a stablecoin, online communities everywhere have developed ways to leverage this technology.
Amidst the proliferation and rising popularity of DAOs, there’s a growing need for effective tools to coordinate and manage these entities. Let’s look at a few useful DAO tools.
A Detailed Look Into Important DAO Tools
DAO tools are algorithmic instruments used to build and manage DAOs. DAO tools make up the fundamental framework on which a DAO operates.
Every DAO needs the right set of tools to achieve its mission. DAO tools help to streamline vital DAO components such as governance, treasury management, and member compensation.
Though DAO protocols like Aragon provide a complete infrastructure for DAOs, most platforms still specialize in single elements within the DAO framework. This guide will explore the DAO tools within a few of these elements.
1. DAO Governance
For online communities without any physical connection to thrive, a functional system of governance is mandatory. The two elements that define DAO governance are member participation and transparency.
DAOs democratize their governance by establishing voting systems that enable members to voice and execute their demands. Most voting systems are token-based. Typically, the number of tokens each member holds determines their voting power. Depending on the type and objective of the DAO, newer models of voting exist.
Transparency is intact as actions or transactions are visible on-chain. DAO members have the privilege of viewing the actions carried out by the community and how their funds flow in and out of the treasury. Also, the code that runs a DAO is open-source, meaning it’s publicly verifiable.
DAO governance is a major area of focus for current and future players in the industry. Let’s look at some platforms providing DAO governance tools:
- Tally builds open-source governance infrastructure for DAOs that enable token holders to make data-driven decisions. Tally’s voting dashboard consists of a comprehensive set of governance tools, real-time research and analytics, and other valuable resources. The platform is suitable for DAOs that need solutions for submitting and voting on proposals. Tally supports Ethereum, Avalanche, and Polygon.
- Snapshot is a decentralized voting system where projects create proposals for people to review and vote. Rather than users incurring the fees associated with on-chain voting, Snapshot uses a decentralized storage network to process data before updating it on-chain. Platforms can bypass the time and complexity of creating a polling infrastructure from scratch. Established protocols such as Aragon, Uniswap, and Yearn use Snapshot.
- Off-chain Service Board. Over the years, high transaction fees, especially on the Ethereum network, have prompted some DAOs to opt for off-chain voting with subsequent on-chain execution. Off-chain service boards like Telegram, Discord, and Discourse provide avenues for members to conduct basic polling. However, as many networks develop solutions to lower their gas fees, DAOs might no longer opt for off-chain options.
2. Treasury Management
The treasury is every DAO’s lifeblood. How DAOs control their asset allocation is critical to their survival. Treasury management tools are the most crucial pieces of a DAO’s framework. A good treasury needs to be transparent, secure, and programmable.
Some popular treasury management DAO tools are:
- Gnosis Safe is one of the most trusted platforms for managing digital assets on the Ethereum network. DAOs can create and manage common multi-signature wallets. A multi-signature (or multi-sig) wallet requires more than one person’s signature to verify and execute a transaction. Gnosis Safe allows users to define the conditions for managing their assets using multi-sig wallets. Online communities have complete control and transparency of their digital assets.
- Juicebox is a decentralized crowdfunding platform that allows projects to raise funds from the community. The platform empowers projects with no-code tools to set up and manage their fundraising and token distribution structure. Their programmable treasury enables community members, who provide the resources, to control which projects to fund and the resource allocation.
Other popular DAO treasury management tools include Llama, Parcel, and Utopia Labs.
3. Contribution and Compensation
One crucial element that brings and keeps communities together is a collective sense of purpose. To strengthen their members’ sense of purpose, DAOs need to provide a structure for participation and offer attractive incentives for participation.
The DAO tools that support member contribution and compensation include:
- Wonderverse is a web3 project management tool that combines the critical pieces for coordination and participation. Wonderverse offers juicy web3 features such as token-gating, on-chain resumes, native crypto payments, and much more.
- Rabbithole enables users to discover, learn, and use decentralized applications (Dapps) or web3 protocols in exchange for crypto rewards. Rabbithole also manages a knowledge base where users can learn about topics such as Defi, NFTs, and cryptocurrencies. Users earn rewards for every task they complete, so it’s a great platform to encourage community participation.
- Gitcoin is a platform where coders and developers contribute to open-source software projects and get rewarded for it. The platform also allows users with project ideas to submit their proposals, crowdsource funding from the community, and discover talent to work on their projects.
- Coinvise empowers web3 creators with the tools to build and maintain community engagement through incentives such as tokens, NFTs, and airdrops. Coinvise is suitable for DAO operators who want to grow loyal communities around their projects.
Depending on their purpose, some DAOs need to demonstrate compliance with existing laws. Currently, states like Wyoming recognize DAOs as LLCs.
That means you can register a DAO LLC and enjoy the benefits of incorporation. For web3 legal services, platforms like Otoco and Twali provide DAOs with the experts they need.
DAO Tools for the Future
The current DAO tooling landscape is rich in products that provide solutions for the seamless management and coordination of DAOs. However, the success of DAOs ultimately depends on the behavior of DAO communities.
The next wave of DAO tools focuses on promoting social integration and cohesion. Decision-making models will remain a key area of concern. As DAOs transition beyond crypto-native communities towards universal adoption, newer DAO tools must simplify the avenues for DAO creation and fruitful collaborations.
If you're looking for a seamless way to manage your DAO and other web3 projects, join Wonderverse today to access our amazing collection of DAO project management tools. From juicy web3 features to native crypto payments, Wonderverse empowers you with the tools you need to get things done.