DAO Development; Tips for Founders – Crypto Business Show Episode 13
Rob: Hello everybody, welcome to the crypto business podcast brought to you by TokenMInds. I’m your host Rob Eijgenraam, director at TokenMinds, a full-service crypto, and nft agency. In this podcast, we’re discussing any blockchain topic that is relevant for businesses, and founders today we’re talking about DAO development. What do founders need to take into account? I have in the podcast with me Josh who is a veteran blockchain development manager, and we are going to talk about what is a DAO. What you can do with your own DAO, the smart contract development of the DAO, and the dev development of the dao. So Josh, let’s start with the first one. What is a DAO?
Josh: So first of all thank you very much Rob for having me here again. In a nutshell, DAO is like building a corporation in the blockchain without CEOs, or any board of directors with only the smart contract governing the direction of the organization, it’s a member-owned community without centralized leadership, and it’s a safe way to collaborate in the internet with strangers, and lastly, it’s a safe place to commit funds for a specific use, that is basically what the dow in a nutshell.
Rob: And what can founders and businesses do with it, with a dao, with their own dao?
Josh: Actually, looking for your dao’s objective is one of the most important things before building one. You can actually define several objectives for example protocol daos like uniswap, provide liquidity, some days are into charity, and they can accept membership and donation from anywhere in the world to fund their charity and events. Some daos are also venture grants, and grants which create venture funds for startups and other starting companies, and it can also be as trivial as voting for the best memes, or the best music.
Rob: Okay that’s interesting, and regarding the smart contract development of the dao. What should founders take into account?
Josh: So for the smart contract development, you will need actually three, in my case I would recommend three important smart contracts that need to be built, so the first one, and the most important one I think is having your DAO token smart contract. This is either an erc20 or erc71 token smart contract that will be used for voting. So for example you can create a specific dao token that will allow your community to vote anyone who has that particular token, or holds a particular token, will be the one allowed to vote in any business decision, or any proposal in the smart contract. Second is the governor which is basically the dow itself, so it contains all the functions of the decentralized autonomous organization, such as being able to propose a certain initiative, canceling a vote, and then specifying a certain voting period, and then lastly these days, this is one of the required, this is not actually a prerequisite for daos, but most of the daos for transparency sake, they use a certain time-lapse smart contract. So this time-lapse smart contract allows specific delays in the execution of the proposal that will allow the token holders to decide whether they can sell their tokens, in case there are certain proposals that they don’t like. So for example, if a certain token holder proposed withdrawing funds from the existing wallet, and then some of the token holders don’t agree with that, they can essentially sell the token that they have and leave the whole community of the dao. Yeah, that’s basically the three smart contracts that you need for building a decentralized autonomous organization or DAO.
Rob: Okay so you need a minimum of three smart contracts, and I guess you also need the dap development right? Are there any things to take from there?
Josh: Yes. So for the dap like any other application on the internet, you will need a certain interface where the community can interact. In this case, you will need a dap. Most of the time it’s like a voting dap, similar to a voting application that you see on the internet. However, the difference is it is connected to a smart contract in a blockchain where the only ones as mentioned a while ago who can vote or propose a certain initiative will be the ones who have the dow token, specific for that particular smart contract. So building this dap might be in a stack like react, react.js, this is the most popular, and then after building this particular dap in react, or for example, all they need to do is integrate it with a web3 wallet to allow the community to vote.
Rob: Okay, that’s good. Thank you so much Josh for this introduction to dao development, really appreciate it. Maybe we can deep dive into some specific areas in further podcasts. For now thanks everybody for listening, and coincidentally, we also have from TokenMinds a special package published on our website about DAO development as well, which you can check out TokenMinds.com/daodevelopment and see you in the next podcast, bye.