What is a DAO and how to optimize it ?

The #DAO term is being misused in the NFT space and DAOs could be way further optimized.

So here is my take on it : ✔️ What is the definition ? ✔️ Why is it misused and sub-optimal ? ✔️ What are the main challenges ?

Full thread below 👇👇

1/15

https://pbs.twimg.com/media/FsAH4kWaIAAx8pR.png

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<aside> <img src="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" alt="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" width="40px" /> maxbrs.sol @MaxBrsNFT: We're seeing the term DAO everywhere now and under so many forms that it becomes messy :

GroupDAO
AlphaCallDAO
Projects owned by a DAO
Projects fighting with their DAO
TraitsDAO
etc

So first, let's go back to what a DAO is 👀

2/15

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<aside> <img src="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" alt="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" width="40px" /> maxbrs.sol @MaxBrsNFT: A DAO (Decentralized Autonomous Organization) is a digital organization that operates autonomously through smart contracts on a blockchain.

There is no central authority controlling them, and instead use smart contracts to automatically execute decisions made by members.

3/15

https://pbs.twimg.com/media/FsAH5aZaAAUz15m.jpg

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<aside> <img src="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" alt="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" width="40px" /> maxbrs.sol @MaxBrsNFT: There are different types of DAOs depending on the vision and outcome you want:

Protocol DAOs
Investment DAOs
Grant DAOs
Philanthropy DAOs
Social DAOs
Collector DAOs
Media DAOs
Creators DAOs
Talent DAOs
SubDAOs
and so on

4/15

https://pbs.twimg.com/media/FsAH55FaIAIwQ1T.jpg

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<aside> <img src="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" alt="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" width="40px" /> maxbrs.sol @MaxBrsNFT: The potential impact of DAOs is significant, as they could revolutionize many industries.

They offer a more efficient, transparent, and democratic alternative to traditional organizations.

And I'm sure we'll see it in web2 sooner than we expect.

5/15

https://pbs.twimg.com/media/FsAH6ZPaEAAGU5F.png

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<aside> <img src="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" alt="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" width="40px" /> maxbrs.sol @MaxBrsNFT: So it makes complete sense to see NFT collections combining the principle of a DAO : Projects and teams can collaborate in a more advanced way with the community of holders 🤝

Most of the NFT-related DAOs refer to protocol, investment, social and collector DAOs.

6/15

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Many DAOs were created by holders which generated lot of confusion vs the team @SolanaMBS vs @MonkeDAO @peskypenguins vs @NootDAO @DegenApeAcademy vs @DegenDAOO

They have/had their own server and role split isn't clear.

7/15

https://pbs.twimg.com/media/FsAH7AvakAAtioG.png

</aside>

<aside> <img src="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" alt="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" width="40px" /> maxbrs.sol @MaxBrsNFT: Another example of misuse is all DAOs acting as a token-gated communities:

all "AlphaDAO" where a team shares calls and WL
TraitsDAO which you access by owning a specific trait NFT
etc.

The word is now accepted to define them but they're not fully functional DAOs.

8/15

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<aside> <img src="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" alt="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" width="40px" /> maxbrs.sol @MaxBrsNFT: Even though they are different level of maturity of smart contract, a DAO needs to be at least

Decentralized : open source and transparent information + every member can participate
Autonomous : decisions proposed and voted by the community + proposals being executed

9/15

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1️⃣ what's the scope of responsibilities between the NFT team vs the DAO and how to keep alignment ?

2️⃣ What's the level of autonomy for the elected DAO representatives ?

3️⃣ how do you incentivize / reward the DAO contributors ?

10/15

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Roles & responsibilities need to be crystal-clear codified between DAO and Team.

Perfect illustration with @hadeswap on @SolanaMBS: team minted 42 Ordinal SMB when the HadesDAO voted ❌

Confusion could have been avoided with defined scopes.

11/15

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Representatives are needed in large DAOs (or 100% DAO owned projects like @TheChimpions)

However, they also need to have a certain level of autonomy agreed upon, ie what's the type of initiatives requiring a vote by the community vs auto green-light ?

12/15

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In order to keep initiatives and proposals from members, DAO contributors need to be rewarded for their time investment with a clear performance system per action.

Reward can come from royalties sharing, token distribution, NFT distribution, etc.

13/15

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</aside>

<aside> <img src="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" alt="https://pbs.twimg.com/profile_images/1490815890920771595/vqOjeTA5_400x400.jpg" width="40px" /> maxbrs.sol @MaxBrsNFT: Setting up a true DAO takes an enormous amount of time, everything needs to be codified and this is by far the less fun part of it.

But once it's all set, it does wonder !

This is the form of DAOs which we'll see in web2 soon. If you master this, you're years ahead.

14/15

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I hope you've found this thread helpful. Like/Retweet the first tweet below so show support 🙏

15/15

The #DAO term is being misused in the NFT space and DAOs could be way further optimized.

So here is my take on it : ✔️ What is the definition ? ✔️ Why is it misused and sub-optimal ? ✔️ What are the main challenges ?

Full thread below 👇👇

1/15

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