Planning to create a DAO project? If so, there are various steps to follow to build your decentralized autonomous organizations. A DAO is a community that determines a product to create on decentralized ledger and a roadmap to implement it. Each member in A DAO should keep a particular number of tokens to allow them to participate in voting. The vote helps in making critical decisions concerning a project. DAO creation occurs around dApps, protocols, and other blockchain-based programs.
The DAO rules are crafted on a computer code and delivered by a smart contract. These smart contracts activate once parties meet the pre-determined conditions. As DAOs lack a central authority, they are collectively managed by their members. Here, we focus on how to build a DAO.
What are the benefits to reap once you create a DAO?
DAOs have become popular in the blockchain ecosystem. Here are the benefits to reap from setting up a DAO:
- Decentralization: while a legacy organization depends on central decision-making authority, DAOs confer decision-making power to all members. This eliminates the possibility of a CEO or Board of Directors making bad decisions.
- Participation: a DAO creates a participatory environment for all eligible members. Members have a say on matters affecting the day-to-day running of the organization. So, people feel valued and more connected to the group when they participate in the decision-making process.
- Transparency: DAOs stay on the blockchain spine. This means that the voting procedure is publicly viewable by all members. Thus, users wish to behave in the best way possible, and their voting decisions are open to all. So, you create a DAO to encourage individuals to adopt behavior that benefits a community.
- Community vision: setting up a DAO on a decentralized ledger inspires individuals worldwide to gather and create a dream. DAO members can interact with each other freely and share constructive ideas to improve the organization. And that’s the most significant benefit to reap when you create a DAO. People from different parts will share constructive ideas that can take the organization to the next level.
Types of DAOs
DAOs are relatively new in the crypto environment and keep evolving in various forms and shapes. To create a DAO, you should acquaint yourself with the different types in the market. Here are the primary forms of DAOs:
These are standard decentralized autonomous organizations and on DeFi protocols. They apply digital agreements to deliver DeFi solutions such as loaning. Protocol DAOs are also an essential resource in administering dApps. Developers can create a DAO, like Uniswap, to provide DeFi services.
A Project can make a DAO help it in accomplishing philanthropic objectives. These DAOs are fundamental in assisting social responsibility programs. They focus on the collective purpose of the Web3 ecosystem. An example of a philanthropic DAO is Big Green which sensitizes people about growing crops that enhance food security.
You can create your own DAO to help members collect outstanding NFTs. A collector DAO gathers finances from members to invest in high-quality NFT projects.
An example of a collector DAO is Flamingo DAO, which helped the community collect valuable NFTs from famous creators, like XCopy and Pak.
A prominent use case of DAO creation is to provide a vehicle for raising investment finance. These organizations function like standard investment funds but lack a central authority. The DAO members take a vote when considering the project for investment.
Steps to follow to build a DAO
Now that you understand a DAO and its primary benefits, the next step is to know how to build one. For example, let’s assume that you want to make a DAO on Solana. You know Solana blockchain development is popular because of the network’s low transaction fees. Also, Solana development allows faster transactions than the Ethereum mainet. Here are the stages to follow to create your own DAO:
Determine the goal of your DAO
When setting up a DAO, it’s critical to determine the goals you want to accomplish with your decentralized organization. Once you decide on the goals, you’ll identify your DAO’s token structure. Also, when you create a DAO, you’ll decide on token sharing and reimbursement methods.
Digital agreement development
Once you determine the goals of your DAO creation and the token structure, the next step entails intelligent contract development. Solana development enables you to create contracts that define the token’s administrative elements. Before you deploy the smart contracts, ensure that you test them to remove all errors and bugs.
Also, when you create a DAO smart contract, ensure that the connection between the contract and other units is smooth. For example, you should think about how voting dApps, wallets, and polling portals should interact.
Creation of the polling portal
A voting portal is a critical aspect when you create a DAO. Here, you must develop an intuitive polling platform that allows users to hand in their proposals and make a vote on other people’s requests. A DAO creates a voting portal that connects with the smart contract and a member’s crypto storage app.
Launching and maintenance
Up to this stage, you’re through with Solana blockchain development and created a DAO product. The next step entails deploying your digital agreement to Solana’s network. Also, you should launch the voting portal and other frontend pieces to the cloud. Furthermore, you should make sure that your product is friendly to mobile gadgets as many people use mobile phones these days.
Once your DAO is up and running, you must update the frontend regularly by adding new elements.
Decentralized autonomous organizations have multiple benefits that surpass the ones of legacy corporations. A DAO is a disruptive idea redefining how people come together to form an entity that pursues their collective goals. Unlike legacy organizations that require a centralized authority in decision-making, DAOs vest the power to members. There are many benefits to reap from forming a DAO. For example, DAOs allow participation by all members, and decentralization removes unnecessary third-party costs. If you want to create your own DAO, follow the steps below. You can create a DAO once you determine your goals. Your goals will enable you to choose the smart contract to develop and how to create a voting portal.