DAO to the Chinese means the way human beings suppose to behave in a particular community. A decentralized Autonomous Organization is a structure of regulations that is built on blockchain collaboratively and mutually governed by members without the need for hierarchical administration and management. The groups work hand in hand through the aid of smart contracts to enable members to approve payments, and venture capital businesses and make other concurrent and like-minded decisions on how the organization's assets and wealth are distributed. Hence, control is spread out instead of stratified.
“It is built on blockchain, encrypted with codes and enforced by smart contracts”.
HOW DOES DAO WORK?
When an organization embraces DAO the stakeholders and associates write out the rules, regulations, terms, and conditions of the community using open source codes and bounds or enforce it with a smart contract that automatically executes whenever a set of instructions are met. This provides a controlled and ordered system without hierarchy, unlike the traditional system. It imitates a company's composition and form
The community has a governance token that the members use to make decisions and the greater the contribution of a member to the project the greater the value of the member's vote increases.
A major characteristic of a DAO is that they generate their capital internally(through the ownership of tokens) which is then used to ensure the organization runs smoothly. DAO is fully autonomous, independent, uncontrolled, and transparent because they are built in blockchain therefore anyone can view their code.
BENEFITS OF DAO
There are countless answers to this question, “Benefits of DAO”. What's more, as the years go by scores of benefits of DAO would steadily come in, especially in their use cases. The benefits of DAO amplify the volume of the value it brings to the table.
Some upper hands advantages of DAO that cause it to trap people's attention are indicated and explained below
COLLABORATION OF THE COTERIE
DAO has provided a space where people all over the world and globally associate or identify with one another to form a coterie that is bound to one vision and goal. Funny enough the community is constrained by no one person or individual rather the members or the supporters of the corporation have distributed control, giving members a sense of ownership. All hands are on deck in structuring the community, no one person is excluded (from the stakeholders to the last person). In truth, stakeholders can present manifestos and schemes on how to ameliorate or upgrade the system but leaving the conclusion of the matter to only those in the boardroom to make is never possible rather that privilege is given to every member.
All that is required to enter into a community's DAO is an internet connection and the community's DAO governance token. These tokens turn out to be indispensable instruments for voting on various protocol projects. With numerous inputs from myriad affiliates of the DAO, groundbreaking unprecedented improvement can then materialize.
DECENTRALIZATION
The leading spotlight of the benefits of DAO is Decentralization. This attribute depends on the cooperative, collaborative contribution and involvement of every member in the community, unlike conventional companies where the stakeholders have the veto power over every decision so the members and employees just follow in the direction the stakeholders are driving the organization. In cases such as these, there are often opposing opinions or perspectives between stakeholders and employees relative to what the clients may want. But assuming that the company was a DAO, the employees (users) will not be led sheepishly by the stakeholders but will have a say by voting to vehemently oppose any decision that doesn't go down well with them. Mind you still, the greater governance token a user(employee) has the greater his voting privileges.
DO THESE BEFORE JOINING A DAO
For the majority, if not all of the DAO you don't need their authorization or permission before you can join - that's what's called “permissionless”. There’s rarely a process of joining compared to the conventional organizations where you need to fill dozens of forms, make myriads of applications and prepare for interviews before you can be considered. It's kind of embarrassing how easily you can join a DAO without stress but by just contributing. Remember DAOs are built on the Ethereum blockchain so owning an ERC20 token indirectly already makes you a member. And the more you contribute the more rewarding it will be.
The aforementioned are the prevalent steps in joining the permissionless DAO.
WHAT DO YOU WANT?
You can't just wake up one morning, join a DAO, get busy contributing yet not know what they are all about. First and foremost you need to take time to decide which DAO, in particular, you want to join or find out what DAO relates to your passion in the entire web3. Places, where you can explore catalogues of DAO, include the DAOlist and deepDAO.
DAO coteries are as numerous as 1000+. One of the DAOs in the service section is the Neptune DAO. It is focused on liquidity provision. If you provide them with liquidity you receive YIELD for their services. DAOs in the grant section include the MolochDAO. There, members contribute capital with the sole intention of giving it all away to fund Ethereum infrastructure as an essential digital public good. One of the DAOs in the media section includes the BanklessDAO. It aims to act as stewards of the Bankless Movement progressing the world towards a future of greater freedom. Another DAO like Friends with Benefits (FWB) is a next-generation social network.
Whichever kind of DAO that interests you and you are inclined towards, don't be too timid that you can't ask questions: if you ask questions someone definitely will be there to guide you through, besides most are humble enough to remember they were once in your shoes.
LOOK THROUGH THEIR CONSTITUTION
Once you have discovered the DAO of your choice the next step is to go through any of their introductory document or constitution. The documents should contain a set of objectives and vision and mission that guide the community's activities. You can find their document on the internet or on their website.
JOIN THE COMMUNITY
Once you have gone through with the charter or constitution, plummet straight to join their social media handles, especially the most active handle, and introduce yourself. Most DAOs use discord while a few use telegram.
BE ACTIVE AND PARTICIPATE
If you are a developer, designer, creator, marketer, strategist, presenter, manager, researcher… and so on. There is a place for you in the DAO. Although the DAO space isn't as diverse as the real world it's gradually becoming, therefore, the earlier you participate wholely the better your long-term prospects.
TOKENS
One of the signatures that you truly belong to a DAO is not just to join their community but to buy their token, this is an advanced stage. These governance tokens are used to unlock access to voting. The more tokens you have the more your voting power.
DRAFT A PROPOSAL
Go ahead and draft an idea and present it to the discord community. The idea could be a problem you intend to solve or something you notice that can be improved on. Or you can take up a role and do it exceedingly well, better than anyone else so that when you propose a pay they won't decline the offer. In some DAOs you post your proposal in the forum for at least seven days, then it will be scrutinized by the community.
HOW TO PARTICIPATE IN A DAO
The most crucial thing for fresh DAO entrants to find out in the DAO of their choice is to discover first what skill set the DAO needs and secondly as a fresh DAO entrant what skill can you offer? If what you can offer is unparalleled to what the DAO requires, then take initiative and go learn the skill that will make you useful to the DAO of your choice.
Before then, as a new DAO entrant, you must have gone through DAOlist, deepDAO, or gateway to browse various DAOs in their sections, groups, and governance. This will enable you to select the one you want to work with or participate in. Supposing you want to join a DAO from scratch and help make it blossom, fine. Then you should be on the lookout for small and new DAOs.
Having concluded with yourself if the DAO is right for you, then get onboard to their discord server and other social handles.
Make meeting people and interacting your priority. And be sincere about it. You can interact with people especially when there is a live event or meetup every week in the DAO. Make contributions, talk, ask questions or if you have got a sense of humor don't be afraid to display it.
You can also promote the DAO on your social media handles. This is one vital way to contribute. You can share links, and memes as well. You can also talk to an admin to guild you on specific roles to participate in.
You can also actively participate in a DAO by performing bounties. Bounties are like rewards you receive for performing an urgent task. There are lists of tasks to be performed in DAOs you can check them out on VoiceDao, newsroom, and layer3.
There are various tasks to perform especially in the area of your skill
As a writer
Text forms a major part of the content and writers are hot cakes. DAOs need newsletters, web content copies, emails, and blog posts.
All you have to do is to work with the product team to plan content marketing for the DAO. Write guides and promotional content.
As front-end developer
You can contribute by designing the interface on which DAO members meet.
You can code an interface that compels visitors' interest and activate their user experience. You can also create mockups of features, as well as design the features of the website.
As a community manager
You ensure that jobs and tasks are completed but this requires extra tolerance and knowledge. You have to take extra initiative to work even if you are not told to work.
You have to swiftly attend to questions, give updates on the latest information in the DAO, moderate sessions, and assign tasks. This is one of the most laborious and arduous jobs in the discord and blockchain world as a whole.
As a designer(UI/UX)
You can contribute to a DAO by producing or designing high-quality images, gifs, and videos.
A very good design grabs the attention of the audience faster than text. Make sure to collaborate with other members of the team in the DAO
HOW DOES CROWDFUNDING WORK
First of all, crowdfunding, as the name suggests, means the financial resources (money) generated by a large group of people. Individuals come together to provide the capital needed to start a business. Individuals who are potential investors can connect through social media or crowdfunding websites.
The decentralized autonomous organization is today the largest crowdfunding system in our world.
Part of the token is securely stored in a treasury or locked and managed via a smart contract. The remaining part of the token is put on n sale. When a member decides to increase their engagement in a DAO, they buy the token, which now serves as the voting leadership token. This money goes into the coffers of the DAO. Potential investors and others can purchase the DAO's tokens, which in turn provide d capital to the DAO. Selling these governance tokens is one of the main means of raising funds.
Another typical way money is made in a DAO is through dividends. They make various investments in companies and potential ventures and then receive prorated cash payments from those ventures
Other ways DAO can raise funds are DeFi lending, fundraising through NFTs, and so on.