According to DeepDAO, there are over 180 DAOs in the world today, and that figure will increase in the future. In September 2021, it was reported that the total assets under management (AUM) that DAOs collectively held grew by 4000% in nine months, going from $380 million in January to around $16 billion in September. The growing interest in the metaverse and Web3 is also fueling the interest in DAOs. In 2022, we expect to find more DAOs deployed on many blockchains as more people embrace the power of decentralization.
If you are not aware about what a DAO is, Read this article: What is a DAO and Why are DAOs important?
DAOs are quite profitable. For example, UNI, the native token of Uniswap DAO, has performed well since its launch in September 2020. DAOs become profitable with growth and value. Finding the right DAO can be tricky if you don't know what to look for. Just as good crypto traders spend a lot of time researching tokens with great prospects, you should take time to research DAOs in your area of interest.
A quick tip: You can treat this as an investment. Many crypto owners purchase DAO tokens without having any interest whatsoever in the project. They only purchase the tokens and wait for their value to appreciate as the DAO grows.
DAO Categories
I'm sure that you are getting excited about joining a DAO. Well, it is pretty easy to join a DAO; you only have to do some research to determine the DAO that best fits your interest. In line with that, remember that DAOs can be focused on anything. Some examples of broad categories of DAOs are:
- Commerce DAOs: These DAOs focus on commercial activities. The DAO community pools funds to run a retail business through tokens.
- Social DAOs: These are among the earliest DAOs to be created. Social DAOs are focused on peer social events. Think of it as a DAO for a virtual club. Members can use their tokens to access certain services unavailable to outsiders.
- Governance DAO: Governance DAOs are also called protocol DAOs and are primarily used in crypto projects to govern a community.
- Media DAOs: Media DAOs pool resources to create and publish media content according to the community's rules.
- Metaverse DAOs: These are relatively newer and focus on creating DAOs for metaverse projects. The metaverse is developing fast, and more DAOs are being created to help communities make the most out of their metaverse investments.
By now, you should understand that there are no theoretical limits to the number of DAOs that can exist; only imagination, function, and purpose can limit the growth of DAOs.
Factors to Consider to Join a DAO
If you intend to join a DAO, there are a few factors to consider:
- Purpose: As mentioned above, DAOs serve specific functions, and you should join one that aligns with your goals. If you want to enter retail, you should join a commerce DAO instead of a protocol DAO. You can narrow the search for a DAO in your interested niche.
- The DAO whitepaper: The white paper of any project gives the details of the project. You should consider reading the whitepaper of a DAO before joining.
- The mode of membership and voting: There are two modes of joining a DAO; the token-based membership and the share-based membership. Token-based membership permits new members to join through purchase or earning the DAO's token. The process is usually trustless and takes place on a decentralized exchange (DEX). Members can deploy the proof-of-work (PoW) or proof-of-stake (PoS) protocol to earn more tokens to vote. Token-based membership is mostly used for DeFi protocols and tokens. Share-based membership permits membership through a tribute-proposal system. In that system, a prospective member can submit a proposal to the DAO and include a tribute (which could be PoS or PoW). The tribute forms the shares of the new members and grants them voting rights. Share-based membership is usually deployed for charity and social DAOs.
- Review/Reputation: There are chances that the DAO that you want to join has a massive presence online. A simple search can help you learn more about any DAO and what it aims to achieve. Many people also leave anonymous DAO reviews that you can check online.
How to Join a DAO?
Once you are ready to join a DAO, perform these steps:
- Visit the top DAO spaces. You can search Twitter for trendy DAOs, DAO Central (https://daocentral.com/) or use tools such as DAOlist and DeepDAO. You can also use the advanced Twitter search feature and include "DAO" in the keywords to search for. Most discussions on DAO happen on Twitter and discord today. From Twitter, you can easily get the Discord and Telegram channel links.
- Purchase a DAO token, or mint their NFT.
- Join the community social media platform (Discord and telegram are popular) and integrate with it. Ask questions and learn all that you can about the DAO.
- Create your contribution and a proposal for it.
- The community will vote on your proposal.
The process is surprisingly easy, so don't get worried that you may reach some blocks. Joining a DAO is far easier than joining a traditional board; you only need to purchase the token in most cases. In addition, many people who own an ERC-based token may already be part of a DAO.
I want to emphasize the importance of getting on a DAO quite early. DAO tokens, just like other cryptocurrencies, are volatile and may appreciate within a short time. Purchasing the tokens of a particular DAO before it increases will save you from purchasing them at higher prices. It is best to keep an eye out for DAO projects about to launch. You can do this by staying close to DAO discussions, identifying the key figures in the DAO news, and following some social media users who regularly share news about upcoming crypto projects. You can also subscribe to some promoters and crypto platforms; they typically announce hot DAOs before going live.
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