What does a DAO need?
1. A DAO needs a purpose.
DAO’s are simply a way of organizing projects or funds. Without a good underlying project and reason, your DAO will have nothing to run.
2. A DAO needs a voting mechanism.
This is the primary way people interact with the DAO and make changes. There are multiple ways to do this. You could create your own voting mechanism or use a third-party provider, as we discuss later. Your DAO may even vote to change the mechanism later, but you need to start with something.+
3. A DAO needs a governance token or share system.
How will people prove their right to an opinion in the DAO? A governance token is very common, and the token often might also be a utility token. A shares system is more common to funds where users deposit cryptocurrencies with the DAO to be invested.
4. A DAO needs a community.
Decentralization gets stronger as more people join and participate in the governance of your DAO. This way, power is spread across more stakeholders.
5. A DAO needs a way to manage its funds.
Most DAOs will have a treasury or access to some crowdfunding. This is usually held in a multi-signature wallet, which can only be used if all key participants agree.
How to create a DAO?
- 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.
- 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.
- 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.
- Fund your crypto wallet with at least 0.3 ETH. You’ll need a little over 0.2 ETH to create a DAO.
- 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.
- Enter a name for your DAO.
- Now, you’ll need to configure your organization. These include Minimal Approval Percentage, Support Percentage, and Vote Duration. The recommended settings for voting percentages are 50% approval. This means more than half of token holders must agree on a proposal for it to pass. You can, however, adjust these numbers to your liking.
- 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.
- Confirm the transaction on your crypto wallet to create a DAO.
- Create the first proposal question once your organization is live. Token holders will then vote yes or no on the issue.
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Best DAO Tools & Platforms to Use
Creating an Aragon-based DAO is quite simple. You’ll need to:
- Own an Ethereum Name Service domain.
- Make sure you have enough crypto to pay the DAO creation fee (0.2 ETH plus gas fees).
- Create an organization linked to the ENS domain through the Aragon DApp. There are several preset organization structures you can use.
- Configure your settings, such as vote duration and percentage support needed, and then launch the DAO.
To create your voting system on Snapshot, you’ll need to:
- Own an ENS domain. This must be on the Ethereum mainnet regardless of what blockchain your project operates on.
- Link Snapshot to your ENS domain.
- Customize your space’s settings, such as admins, voting power strategies, terms, etc.
- Verify your space. This will include having at least 1,000 members and proof of ownership of the related project.