The different flavors of DAOs in Web3

A quick guide to decentralilzed autonomous organizations

To those outside the world of crypto, the term DAO (see our Glossary definition) may seem like a foreign concept. But even for those steeped in the promise of Web3, DAOs can be a slippery concept.

In short, the purpose of DAOs is to give some measure of ownership or input to members of a community. And because of their grassroots, decentralized nature, a whole lot of different kinds of DAOs have sprung up over the past couple of years.

In a recent post on Mirror, Kiran Cherukuri and Gaby Goldberg described the power of DAOs this way:

Numerous leaders in the space have already proclaimed 2022 as the Year of the DAO, and for good reason. This year, DAOs like Friends with Benefits, PleasrDAO, and Nouns have shown us the monumental scale of squad wealth creation that decentralized coordination enables. Over just a few months, some of the most prominent DAOs have shipped viral products, amassed $20MM treasuries, and become supreme purveyors of internet culture.

On the Nov. 30 episode of the Means of Creation podcast, co-host and venture capitalist Li Jin ran through her thinking about why she formed a new investment fund devoted to Web3 projects. And in so doing, she began describing some of the different kinds of DAOs she has come across during her work at Atelier Ventures. “There are like 100 new DAOs springing up every single week. Each one has a different mission,” she said.

Here’s the video of her being interviewed by co-host Nathan Baschez.

Multiple varieties of DAOs

I thought it would be valuable to help describe the different varieties of DAOs as a way to help others in the space who are trying to figure out what kind of structure they want to set up for their project or organization. This is not a comprehensive list — and these are not neat buckets by any stretch — and there are lots of ways to slice and dice these (many of the ones below would be considered Creator DAOs or Art DAOs). So if you’ve come across other DAOs with a different raison d’être (reason for being) that deserve to be in this roundup, do share in the Comments below.

Web3 Infrastructure DAOs

That’s the name I’ll give for collectives that come together to support building the architecture of Web3. (Li called these Protocol DAOs, but protocols are only one part of this.) Some of the bigger names in crypto fall into this category, including Uniswap, a decentralized crypto trading exchange where community members community coordinate on governance proposals, and SushiSwap, another decentralized community-driven platform where members direct development of the protocol. Another, HyperDAO, is a launchpad for decentralized exchanges and intial DEX offerings. Curve is an exchange liquidity pool on Ethereum designed for stablecoin trading, and the Curve DAO requires you to connect a wallet. BadgerDAO is a decentralized collective of developers, strategists, and content creators who seek to build and support new Bitcoin-focused products. And one of the granddadies of them all, MolochDAO, is a community DAO focused on funding Ethereum development in the name of Moloch the God of Coordination Failure.

Investment DAOs

One of the most interesting flavors of DAOs is the Investment DAO, where members come together to collectively make investment decisions. In some, such as Flamingo DAO, the members are amassing a catalog of valuable NFTs and other blockchain-based assets that they believe will grow in value over time. Neptune DAO, with 10,200 eth added, is a liquidity DAO for scaled yield returns.

Social DAOs

Social DAOs are just that. The community comes together not to build or earn or create but to interact, hang, socialize and learn from one another. But often these groups do much more. PartyDAO (“party with your on-chain friends”) describes itself as “a decentralized autonomous organization that builds and ships products” and that “lets groups of people combine their capital and bid on NFT auctions together” through its PartyBid tool. Friends With Benefits ($FWB) may not technically be a DAO but it feels like one; it’s a new type of private social community using tokens for access and rewards. On other Social DAOs, Li said, “People are there to socialize with each other and bond over shared interests.”

Art DAOs

Art DAOs themselves come in several different forms. Some Art DAOs have formed around a particular artist. Others have formed organically by adherents of a specific art movement or school. For instance, owners of a Chromie Squiggle NFT can join Squiggle DAO, a DAO foundry for on-chain generative art. PleasrDAO was initially formed to buy an NFT by the artist pplpleasr. But it’s grown organically into a community to buy NFT art and support emerging artists.

Game DAOs

As you might expect, DAOs for gamers are flourishing. The ReadyPlayer DAO declares: “The future of gaming is decentralized and permissionless, and this time, the players are in charge. Play-to-earn (P2E) is revolutionizing the power structure through collaborative, positive-sum organizations governed by their members.” Yield Guild Games, a DAO with over 87,000 guild members, lends NFTs to gamers to split in-game profits. And then there’s GameDAO, a community owned cooperative providing fundraising, coordination and ownership protocols for the videogames economy.

Music DAOs

Li and Nathan spent a lot of time discussing the need for Spotify to support musicians, though I don’t think they mentioned any Music DAOs, where fans of an artist come together to support the musician’s career and potentially earn a share of royalties. Here are a few:

• Audius is a community-owned streaming protocol and platform, with Web3 stalwart Cooper Turley heading up crypto strategy, that seeks to democratize music-making and spotlight talented emerging musicians and reward those who back them.
• MODA DAO, a decentralized network designed to democratize the music industry in the metaverse, is supported by no less than deadmau5.
• LA music label Leaving Records says they’re forming a new organization called Genre DAO.
• Dreams Never Die is an independent record label preparing to convert into a DAO.

Media DAOs

In a media DAO, Li said, the members “are essentially putting content out into the world as a collaborative effort. And everyone has an ownership interest” via the DAO’s token. Li cited the DAMN project, the acronym for decentralized autonomous media network from founder Kiran Cherukuri and VC Gaby Goldberg. And while the project raised 25 eth ($110,000), it’s not clear that the participants have any media experience (I know some folks think that’s an advantage) or what will emerge from the project.

Li also mentioned a project by Kyle Jacobs that I couldn’t find, though I did spot his 2019 call for an art DAO. And she cited the burgeoning number of creators who are setting up token-gated Discord groups. As a result, “everyone [who joins] is incentivized to help the creator succeed, because they own a portion of the social tokens.”

Special-interest DAOs

Certainly a big subcategory of DAOs are special-purpose DAOs where a community comes together, sometimes quickly, for a cause or a collective action. A good example would be the Constitution DAO that formed this past autumn to bid on one of the original copies of the U.S. Constitution. They were outbid by a hedge fund manager, which tells you something about the state of the world today. But the power of these groups is just beginning to swell into an unstoppable force.

Others’ takes on DAOs

As I was publishing this article, I came across a recent post by Dave Peck, an old friend, who is also helping to sort out the different kinds of DAOs out there. Here’s his list at PSL.com:

– Protocol DAOs control updates to the economic parameters of smart contracts; here, voting is typically on a very narrow set of proposals (tweak parameter X; update contract Y) and the results of votes are typically executed by smart contract code. (MakerDAO, Uniswap, Compound Finance)

– Investment DAOs pool resources to make further arbitrary crypto investments. (theLAO, Komorebi)

– Collector DAOs are investment DAOs that focus primarily on NFTs (PleasrDAO, Flamingo, SquiggleDAO)

– Grants DAOs are investment DAOs that focus on issuing grants to other DAOs, typically DAOs that seek to build further crypto infrastructure. (MetaCartel, MolochDAO, Uniswap Grants)

– Social DAOs are real-world communities typically interested in the creation of new literature, art, and economic thought relevant to the crypto world. ($FWB, SongCamp, CabinDAO)

– Agency DAOs organize typical real-world agency work, like graphic design and smart contract development (Raid Guild, MetaFactory)

– Service DAOs provide miscellaneous group services to the crypto ecosystem (PartyDAO, TheGraph)

– Media DAOs align groups of journalists, filmmakers, and educators typically around growing the crypto ecosystem. (BanklessDAO, REKT)

How about you? What other kinds of DAOs have you run across in Web3?

This post originally appeared on the Digital Culture Works blog.