DAO Creation Guide: 5 Steps to Build Your Decentralized Autonomous Organization

Decentralized Autonomous Organization ( DAO ) is thriving in the crypto space, with thousands of DAO projects emerging. From Protocol DAOs, Creator DAOs to Social DAOs, and even DAOs for bidding on artworks, they are everywhere.

DAO is seen as the future of work and serves as the coordination layer of the crypto world. It enables people to collectively make decisions on resource allocation globally, forming a new type of digital community.

To create a DAO, you only need two elements: a clear mission and a method of community communication. Other aspects can be completely imaginative. Here are the 5 key steps to creating a DAO:

1. Establishing the Mission

Establishing a mission is the first and most important step in creating a DAO. You need to clarify the goals and vision of the DAO, providing members with a clear direction to strive for.

The mission of a DAO can be in any direction, for example:

• Fund public welfare undertakings
• Collect art pieces
• Promote cryptocurrency
• Establish a social club
• Develop Open Protocol
• Purchase specific items

After determining the mission, the next step is to attract like-minded people.

2. Establishing a Community

This may be the most challenging step. First, determine the scale and openness of the DAO - is it to establish a large open community, or a small and elite closed group?

You can gather members and start discussions using platforms like Discord and Telegram. Combining these communication tools with web3 tools like Collab Land can create a better experience.

Establishing a community library of on-chain addresses is also important in preparation for the subsequent allocation of ownership and governance rights. This can be achieved by distributing POAPs, NFTs, or collecting ENS domain names.

3. Fund Management

The shared community treasury is the core of the DAO. It is necessary to determine how to guide and manage funds to achieve the DAO's mission.

The source of funds can be:

• Protocol Usage Fee
• NFT Membership Sales
• Launch products and projects
• Obtain investment

After the funds are deposited, the next step is to establish a management mechanism.

4. Governance Mechanism

Although not everyone likes it, participating in governance is the civic duty of DAO members. Common governance processes include:

1. Community Discussion
2. Forum Proposal
3. Token Voting
4. Execute Proposal

A delegated working group can be established to expedite decision-making, but attention must be paid to the degree of decentralization.

5. Ownership Distribution

The final step is to allocate ownership, representing membership and voting rights. There are mainly two ways:

• fungible token ( ERC20)
• Non-fungible Token ( NFT )

ERC20 is more suitable for guiding internal economies, while NFTs are easier for selling memberships. In the future, both methods may be used simultaneously.

In summary, the 5 steps to create a DAO are:

1. Establish Mission
2. Build a Community
3. Establish a fund pool
4. Establish governance mechanisms
5. Allocation of Ownership

The rest depends on your and the community's performance. DAO will become the mainstream form of organization in the future, providing humanity with a brand new way of collaboration. Now is the best time to start a DAO venture!