Member-only story
What’s In A DAO?
Welcome to Crypto Witch Club’s 101 on all things DAO! In this DAO demystification, we’ll share DAO basics, how they operate, and how you can get involved.
We’ll also give you a shortlist of DAOs you can get started with: from art curation to DeFi, marketing guilds, and sustainability collectives. An extended version of the article will be featured in our upcoming ‘zine — World Witch W3B, Issue #1. This ‘zine will be available for free to all Club Card holders. Learn more about how to join our Club Card Community here and mint your first Club Card here. Our current sticker challenge — All About Tokenomics — is open for another 2 weeks. Collect them all and get your 2nd Club Card sticker locked in before the drop ends!
Demystifying DAOs
DAO is an acronym for “Decentralized Autonomous Organization,” and it’s a type of organization that operates on a blockchain network, such as Ethereum.
In traditional organizations, there’s typically a hierarchical structure with a centralized decision-making authority. (Think employees, managers, c-level, and shareholders.) By contrast, in a DAO, decision-making is decentralized, meaning that it’s spread out amongst the members of the organization, and each person has a say in how the organization operates. These capabilities are achieved through smart contracts that automate decision-making based on the consensus of the organization’s members. Because a DAO is autonomous, self-governing, and operates according to pre-defined rules and code that’s built into the blockchain, there’s no need for a centralized authority to manage the organization. (NICE!)
What can a DAO do? A few things! DAOs can manage decentralized protocols. DAOs can be used as vehicles for group investments. DAOs can be a club or non-profit. DAOs can also be a branding or marketing agency. DAOs are still a relatively new concept, not recognized as a legal entity (yet) and there’s still a great deal of experimentation and innovation happening in the space. As web3 technologies continue to develop and mature, it’s likely that we’ll see more types of DAOs emerge.
