As human beings, one thing that sets us apart from other species is our incredible ability to work together. Since time immemorial, we have organized ourselves into communities, clans, groups, and societies to achieve a common purpose.
Today’s world is a reflection of these earlier organizations. With the advent of technology, we now have more ways to collaborate. While the internet provides us with an avenue to be part of online communities, there’s still much to be desired, especially when it comes to trust and governance.
Decentralized Autonomous Organizations (DAOs) are the new entities set to disrupt the industry. DAOs promise to bring back trust and democracy in organizational management. By streamlining the design and operations of organizations, DAOs supercharge the power of communities.
This blog post will dive deep into the fabric of DAOs, and show you how to join a DAO if you want to take part in the next era of internet technology. Let’s get started.
Understanding DAOs: An Overview of Decentralized Ecosystems
In his book, Managing People is Like Herding Cats, author and professor Warren Bennis presents an interesting point of view. Bennis notes that the most successful organizations in the future won’t be managed – instead, they will be led.
If his word is anything to go by, modern-day organizations need to go through a fundamental shift in their structure and management to position themselves as industry leaders of the future. DAOs are an essential part of the machinery that will drive this revolution.
What are DAOs, and why do they matter?
Perhaps, the simplest way to define a DAO is that it’s a decentralized online community with a shared bank account. Decentralized means that they don’t have centralized control. Instead, communities lead their DAOs.
Community members usually vote on proposals to make decisions for the DAO. The decisions made get implemented using smart contracts. Smart contracts are self-executing pieces of code that deploy when certain conditions are met.
DAO members need to buy its tokens to access voting rights. For most DAOs, each member’s voting power is equivalent to the number of tokens they hold, but this is not standard. Voting as a method of governance ensures that every DAO member has a voice and that there’s a consensus on how to spend resources.
Apart from participation, DAO members also enjoy unmatched transparency. All transactions that take place in a DAO are visible on-chain. The code for DAOs is also verifiable by the public, making sure everyone can see how the DAO works.
The history of DAOs
DAOs date back to 2016 when a few Ethereum community members announced the creation of The DAO, the first ever DAO. The DAO was a platform that allowed anyone to pitch their ideas and receive funding if members supported them. Think of it as a venture capital firm with the community members in control.
Due to its intriguing concept, The DAO managed to raise 12.7 million Ether (ETH), which was around $150 million at that time. However, the story of The DAO was short-lived. Hackers somehow found a way to exploit The DAO’s code and drain millions of funds from its accounts, leading to its dissolution.
Since then, DAOs have come a long way. Many platforms have come up with interesting solutions to address issues such as security and governance. Some of the biggest DAOs include decentralized finance (DeFi) platforms such as Uniswap, Compound, and Bankless, which enjoy massive liquidity.
Recently, the rise of decentralized exchanges (DEXs) has contributed to maximizing the potential of DAOs. DEX platforms make it easy for anyone to invest in DAOs from any part of the world. DEXs allow users to swap their crypto assets for DAO tokens, the instruments of membership and governance.
Creating DAOs is also easier since several projects provide open-source tools. Check out the comprehensive collection of web3 tools Wonderverse provides to help you create and launch a DAO in a matter of minutes.
How to Join a DAO In 3 Simple Steps
Joining a DAO is simple. Most people shy away from the idea because they think they require technical expertise to participate.
However, the average person can participate in the DAO revolution without needing technical skills. Let’s go through the three simple steps you can take to join a DAO.
Step 1: Do the DAO Deep Dive
Before you consider joining one, you must get familiar with the concepts that govern the DAO ecosystem. A basic understanding of blockchain technology will come in handy.
DAOs differ in several ways, and having some context will help you choose the right DAO. Ensure you do your research to gain clarity on what DAOs are and how you can leverage their potential.
Step 2: Select a DAO
The most important thing to consider when selecting a DAO to join is its mission. Find one whose mission resonates with your goals. Otherwise, you'll end up feeling isolated from its community and will never contribute at all.
There are several types of DAOs. Your interests will determine the kind of DAO you join. The most common types of DAOs are:
- Investment DAOs: These platforms allow members to pool their resources and invest in businesses or projects.
- Service DAOs: Service DAOs create funnels for contracting professional services. From creative to legal to medical, many service DAOs now bring together different professionals.
- Protocol DAOs: Protocol DAOs transfer power from core development teams to the hands of the community through the issuance of governance tokens. These tokens grant token holders the power to propose, vote, and carry out changes in the network.
- Social DAOs: Social DAOs help community members pursue their interests and run digital businesses.
Other types of DAOs are collector, media, grants, and NFT DAOs. After you decide the type of DAO that’s best for you, you need to choose the DAO itself.
At this point, a DAO directory is your most valuable asset. You can use a directory like Deep DAO to find DAOs in every category. DAO directories ease the process of finding well-performing or high-potential DAOs.
Step 3: Join the DAO
Throughout the process of how to join a DAO, you must keep in mind that DAOs are about communities. So, before joining, try to connect with DAO communities across different social platforms.
You can find most DAO communities on Telegram and Discord channels. Only when you connect with these communities will you get the feel of what the DAO is all about. DAO communities should foster a sense of inclusivity and participation.
Every DAO has its guidelines on how to admit new members. For some, members are admitted only through invitations or membership applications. Whatever the case, one common requirement for most DAOs is that community members acquire some of their governance tokens to participate.
Governance tokens are not only used to vote for proposals. They may also act as the cryptocurrencies that facilitate transactions within the DAO ecosystem. Governance tokens can be purchased from crypto exchanges. Cryptocurrencies like Bitcoin and stablecoins like USDT are commonly swapped for specific governance tokens.
These tokens are then held in digital wallets such as Metamask. In the web3 space, your wallet address is your identity. Therefore, to join a DAO, you’ll need to connect your wallet and deposit the number of tokens required, and voilà! You’re now part of the DAO.
You can start contributing proposals right away or voting for other members’ proposals. You can contribute to a DAO in several ways, with some providing opportunities to get rewards in their tokens.
The DAO Dream: Maximizing the Power of Communities
When we come together, we can achieve a lot of things. Of course, that is easier said than done. Our interactions are riddled with issues of trust and governance, slowing down our growth. DAOs are here to address these pain points.
DAOs give you the chance to not only gain financial incentives but also connect with people of similar interests. In essence, DAOs strengthen the sense of purpose, the central pillar on which communities are built.
Understanding how to join a DAO includes doing your research, selecting the right DAO, and purchasing their governance tokens to become a member. Within the DAO ecosystem, your voice is critical, and you should participate in the decision-making process. Without a doubt, DAOs are the holy grail of 21st-century organizations.
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