This story comes out of PubDAO, a decentralized news wire.
So you want to start a DAO? Why not? All the cool kids are doing it. Like “blockchain” and “DeFi” before it, DAOs have become a buzzword in the crypto industry.
And they’re raising money at a feverish clip. ConstitutionDAO raised just over $45 million in an attempt to buy a copy of the U.S. Constitution. More recently, FreeRossDAO raised $12 million to win the Ross Ulbricht NFT collection auction.
The technical process of starting a DAO is not incredibly difficult:
- Draft a mission statement.
- Spin up a Discord server.
- Invite people to join.
- Launch a governance token.
- Use Snapshot and other tools for voting and logging member contributions.
The hard part is scaling it.
“It’s extremely easy to launch a DAO,” said Eric Arsenault, head of ecosystem at NFT marketplace Rarible and a core contributor to Rarible DAO. “The harder aspects of launching a DAO are forming the cultural norms, processes, and accountability tools that are essential for success. Having a committed group of contributors is essential.”
What is a DAO?
Let’s take a step back for anyone new to DAO-land. DAOs (decentralized autonomous organizations) are online groups that use smart contracts to manage member participation, voting, funding, and more. While traditional corporate structures resemble a tower, with a select few at the top and the majority in the middle or the bottom, DAOs spread out like a net and give all members a say in decision-making.
The most famous (and now infamous) DAO, called The DAO, was built on Ethereum in 2016 and…