How to Create a DAO in 10 Simple Steps
Our goals tend to evolve with time. Before blockchain, most of us were happy to have twenty followers on our Facebook page.
Now, we can build houses in cyberspace and create our own Decentralized Autonomous Organization (DAO).
This article will show you how to create a DAO company or a private community on the blockchain.
What is a DAO?
A DAO operates on the blockchain, based on its own set of rules. It has no hierarchical structure and is managed by a group of networks. This group becomes larger as more members join the DAO. No single member will have authority over another but may possess more voting power. Think of it as a neighborhood and the networks involved are the homeowners living in it.
Anyone can join a DAO. Purchase a few of its native currencies and you’ll become a full-fledged member. This usually happens during the funding phase of the project. When you create a DAO, this step will require the most of your attention.
DAOs are often built on a single mission. It could be anything from managing a multi-layered corporation to a local church’s fundraiser.
Some don’t even need a good reason to create a DAO.
For example, CityDAO. This platform offers to sell you a virtual representation of physical land as NFT and people vote on what happens to it. Why does anyone want to buy digital replicas of land? We don’t know.
What we do know is that it works. DAOs have been growing in numbers. There are nearly one million active members across all decentralized platforms today.
How to Create a DAO
The best way to create a DAO is through an established platform. Applications like Moralis offer code templates, which you can copy and paste to quickly set up your project.
Aragon is one of the most popular choices for decentralized autonomous organizations. We’ll show you how to create a DAO on Aragon through the following steps.
1. First, set up a crypto wallet. You’ll need it to pay for the setup fees. Metamask is by far the best option for this type of transaction.
2. Go to Aragon and click on Create Your DAO. This will take you to the welcome page where you will see two options: Create an organization and open an existing organization.
3. Connect Metamask or a crypto wallet to Aragon. Make sure to use the Ethereum Mainnet if you have other networks connected to the same wallet.
4. Fund your crypto wallet with at least 0.3 ETH. You’ll need a little over 0.2 ETH to create a DAO.
5. Click on Create an Organization and select your template. What you choose has little impact on your DAO except for Open Enterprise, which is a center for Dapps.
6. Enter a name for your DAO.
8. Set up a native token for your DAO. Name it anything you like and create a symbol for it. You can also distribute tokens to the DAO members in the same step.
9. Confirm the transaction on your crypto wallet to create a DAO.
10. Create the first proposal question once your organization is live. Token holders will then vote yes or no on the issue.
Things to Consider Before You Create a DAO
Members of a DAO may face unlimited liability.
DAOs are not corporations. They don’t follow any of the legal formalities expected of an official company. You might be risking more than just your capital investment.
DAOs face many legal challenges.
Due to decentralization, DAOs aren’t recognized as legal entities, especially in the United States. They do not enjoy corporate privileges or protection from the government. In other words, legal disputes within a DAO are extremely difficult to resolve.
DAO members are anonymous.
The structure of a decentralized autonomous organization allows associates to withhold their identity. KYC suddenly becomes a luxury. You won’t know anything about the people you work with except for their wallet addresses.
Conclusion
Now you know how to create a DAO, it’s time to realize your idea. On a foundational level, DAOs help us connect with the world and like-minded people. It was built on a financial basis but has become more like a community.
Many DAOs are created for charity and non-profit purposes, such as the Big Green. We’re confident there will be more and looking forward to DAOs overcoming their challenges.