Three great use cases for DAOs
As DAOs technical capabilities rapidly evolve, we can be certain their best uses are yet to be imagined. But DAOs are already transforming community and collaboration. To illustrate, let’s look at three types of organizations DAOs are great for.
Giving
With a visible on-chain voting process and transparent treasury, DAOs possess many desirable elements for charitable and grants organizations and the people who support them.
Rather than relying on a centralized intake team, which can create bottlenecks, many DAO structures allow any member to field and guide requests through the application process, while also rewarding them for doing so. And, all members of the DAO can vote on where funds go and easily view treasury activity, enabling them to participate in the process and be easily and accurately informed about the group’s actions. Accessible information about how DAO funds are used is core to the DAO ethos.
DAOs like Gitcoin exist to fund and build web3, with the membership collectively determining the direction of web3 through the awarding of grants. DAOs like CommonLands and Big Green DAO - addressing affordable housing and food insecurity, respectively - exist for purely charitable purposes, but unlike traditional charitable foundations, members have input into how solutions are designed and funds are distributed. Those underwhelmed by how today’s most pressing social problems are being addressed, might consider living up to the ideal of ‘being part of the solution’ by joining a charitable DAO.
Collective Investments
The transparency offered by DAOs is well-suited to facilitate a group of people collectively investing in assets that they might not be able to afford individually. An example of this is Flamingo, whose membership has collectively invested nearly 8,000 ETH ($27M USD) in a prized collection of NFTs. Off-chain, Pokémon Trainers - having solved for the issue of custody by arranging for third-party, insured warehousing of the group’s assets - aims to unite Pokémon enthusiasts around the central goal of amassing a perfect first generation set, estimated to cost $350,000 - $400,000, perfectly illustrating how the whole can be more than the sum of its parts.
Freelancing Guilds
Some of the earliest and most impactful DAOs were created as freelancing guilds - groups of individuals who share knowledge, tooling, SAAS subscriptions, and a client base. The benefits of such guilds are clear: clients can find the exact skills they need from an established source offering broad experience and skills, while designers and developers can focus more on work and less on the logistics of sourcing work and collecting payments while maintaining their autonomy. Freelancing Guilds playing major roles in building web3 include RaidGuild, whose members include designers, marketers, developers, and web3 consultants, and more specialized guilds, such as Vector DAO and YAP DAO, which focus on web3 design services and public relations and communications, respectively.
It’s thrilling to see the various ways the DAO structure can be put to work, and we can’t wait to see what it brings next.
Did we fail to mention your favorite use case for DAOs, or the next big thing? Share in the comments or contact hello@logos.xyz to guest author a piece.