A DAO is a type of governance commonly used for DApps and is popular because of its openness and decentralization. To create a DAO requires the proposed solutions and votes of the participants. Also, there is a lot of open source code available to create a DAO.

39 1

Summary of DAO

  • A DAO (Decentralized Autonomous Organization) is an automated organization. Automation means that the system operates on its own without human intervention. A DAO is created and managed by the DAO project and the general management community.
  • “The DAO” is an Ethereum venture fund established in 2016. After 3 weeks of token sales, the project encountered difficulties and suffered heavy losses. Despite the difficulties and challenges, the DAO gradually improved and became one of the popular governance models in the Decentralized Finance (DeFi) project.
  • While there are many different DAOs out there, they all follow the same basic principles. The number of tokens a person owns will be proportional to the number of votes in the governance of the DAO, and these people can make proposals that change the way the DAO works.

The basic elements for creating a DAO

Consists of five basic elements:

  1. Purpose: you don’t have to think far, it’s simply a way to organize projects or investment funds. The DAO needs a good and reasonable project to implement, otherwise it will become useless.
  2. Voting mechanism: The voting mechanism is the most practical way for participants to interact with the DAO. You can also create your own voting mechanism, so you can also vote for changes.
  3. Need a governance token or sharing system? The governance token is a popular choice. In addition, there are many types of tokens for you to choose from. The share system is also popular for users to tokenize into the DAO to invest.
  4. Need a community: The decentralization of the DAO helps it attract more people to join and participate in the management of your DAO. Whoever owns more tokens, the power will be transferred to the related party.
  5. Require a method to manage their funds: All DAOs have a treasury or privacy when accessing crowdfunding. This amount is usually kept in a multi-signature wallet, and the funds are only usable with the consent of all participants.

How to create a DAO?

There are two simple solutions:

  • Aragon

Aragon will allow you to create a DAO on Ethereum, Polygon, Andromeda, or Harmony. It will provide source code via Client-Aragon, allowing for the creation of customizable DAOs. Creating a DAO on Aragon is quite simple, you just need:

  1. Have your own domain name Ethereum Service
  2. Ensure that you have enough crypto to create a DAO (0.2 ETH plus gas fee).
  3. Using the Aragon DApp, create an organization associated with the ENS domain. It will have a number of constructs available that you can use.
  4. Customize options such as polling duration and support percentage.
  5. Begin running DAO
  • Snapshot

Snapshot is a custom off-chain voting mechanism. It will adopt the digital signatures of the token holders. To create a DAO voting system on Snapshot, you will need to:

  1. Own an ENS domain. This has to be done on Ethereum itself, no matter what the operation is.
  2. Connect Snapshot to the ENS domain
  3. Personalize settings such as admin, voting strategy, permissions, and so on.
  4. Double-check your space at least 1,000 members and proof of ownership of the project.

Why create a DAO?

For cryptocurrency projects, especially based on smart contract models, DAOs have a number of significant advantages. The code on the DAO is less dependent on the human head to function. A new proposal will be uncensored and technically impossible to cheat.

On the contrary, DAO gives users anonymity. Participants do not need to reveal their identity to everyone. On the contrary, it also helps users organize themselves effectively. The way of creating a DAO is also very effective because it is international and widely available. Moreover, with the low cost of creating an organization, the DAO is an effective option that you can choose.

How to create your own DAO

Step 1: Go to Aragon and click on “Create Your DAO.”

  • You can choose multiple mainnets and different testnets.
  • Next, make sure to connect the wallet by clicking on the “Connect Account” button.
  • Select MetaMask, get approval, and click “Create Organization”.

Step 2: There are many templates for you to choose from, such as company, employee status, reputation, open business, dandelion, etc., and many more. Each sample will have a different goal depending on the purpose of each person.

For example:

  • COMPANY template – allows you to use the transfer code to represent ownership shares in your company. Decisions are based on share votes.
  • Template Membership – allows a transfer code to be used as a member. Decisions made are equivalent to 1 vote.
  • REPUTATION template – allows the use of transfer codes to represent reputation. Decisions are made by reputable voting.
  • OPEN ENTERPRISE Template – includes 1 app for organization like projects, planners, etc.
  • Model DANDELION – facilitates collaboration with an organization to assist in the resolution of disagreements.
  • SPONSOR Template – allows you to run a crowdfunding campaign.

Step 3: Select a name

This is the part where each individual organization makes a name for itself. The name you set will be sent to your organization’s Ethereum address and cannot be changed once you have launched it.

Step 4: Nail the template configuration

Here you set up your voting. You configure it by the percentage of votes you need to approve and set the voting deadline. Percent support is the percentage of notifications that are approved for a vote in favor of consent. An approval percentage is the percentage of votes from the remaining pool of tokens requested to be proposed. The voting period is the voting period.

Support and approval are very strict requirements for votes not to cross the set threshold. There is no more or less.

Step 5: Go over the information again

You will be double-checked with your settings and configuration information before launching the organization. If you make a mistake, you can go back and change it.

Step 6: Establish the organization

After you click “launch organization,” the MetaMask wallet will pop up for approval. Finally, click Confirm. That’s how you create your own DAO.

See ya in the next article !

Don’t forget to follow useful articles about Crypto Market from team Holding B !!!