Steps to follow for launching a DAO
Sometimes reminding the definition of DAO is essential to continue our journey on the creation of decentralised applications.
![network dlt](/sites/default/files/inline-images/iStock-684040590.jpg)
A DAO is an independent organisation run by communities and without a central authority. The underlying laws are established through smart contracts that decide the selected line of action to be taken in the future. Members can at any time freely evaluate the DAO's digital code, vote and make suggestions.
But do you remember what a smart contract is?
![smart.contract.](/sites/default/files/inline-images/iStock-1310348628_0.jpg)
The term smart contract refers to a set of digitally defined promises with predefined terms and conditions, within which the parties agree to keep their promises. Specifically, smart contracts digitize agreements by converting terms and conditions into digital codes that are automatically executed when the parties fulfill their contractual promises.
As mentioned in previous lessons, when we talk about the technical aspect of building a DAO, there are several ways to proceed. For instance, you might choose to create a DAO with a qualified company for blockchain development projects.
Alternatively, if you have experts with a good level of experience, you can use available software for creating DAOs, such as Aragon, DAOstack and DAOHaus.
In summary, after having identified:
- The community and the founding team
- The type and the purpose
- The organisational structure of the DAO
- A token governance, thus the use cases (rewards and incentives, voting and benefits) and the token allocation (a part assigned to treasury, Airdrop, investors...)
- You will have to choose which platform to use, and then a way/tools to manage 'your' community and its funds.
![mp](/sites/default/files/inline-images/main%20daos%20platforms.jpg)
- Aragon is by far the largest DAO platform, with currently 1700 DAOs collectively managing $900 million. Aragon allows you to create a DAO on the Ethereum and Polygon blockchain, and aims to extend the use of DAOs as a free and open-source technology to enable the creation and management of decentralised organisations in different forms.
By providing a static template to create your own DAO, it also allows you to create a customised one. Customisation is allowed through 'apps' (sets of smart contracts), which can be installed or removed from DAOs by voting. The scope of the apps has a wide range, including: a Finance app to allocate DAO funds, an Agent app to interact with other Ethereum smart contracts, a Token app to manage membership, and a Vote app used as a decision-making system.
- DAOstack is a platform that aims to face the problem of governance scalability. Matan Field, co-founder, claims that the larger a DAO is, the more difficult it is to manage.
DAOstack proposes the Holographic Consensus (HC) decision-making system that enables scalability without damaging resilience. Proposals must be approved by absolute majority and relative majority only applies if certain conditions are met.
- DAOhaus implements a simple voting system, which is basically a non-quorum system where a relative majority is always sufficient to approve a proposal. A key aspect is the 'rage quit' mechanism, which allows you to leave a DAO with your share of the capital if you do not agree with the result of a vote.
Once your DAO has been set up, the next step is to set up your instruments.
Enjoy the next lesson for an in-depth analysis of the most popular DAO management tools!