How to start a decentralized autonomous organization (DAO)? What steps are required to start a DAO?
DAO uses smart contracts to work in the blockchain. These smart contracts are made up of code blocks that help automate operations when a set of conditions are met. Although Ethereum is the first blockchain to use smart contracts, it has now been deployed on other blockchains. There are several factors to consider when introducing a DAO. In order to ensure that you carry out this process in a systematic way, the following is the step by step process of starting the DAO. The following example uses the Ethereum network.
1. Determine the structure of the DAO
Before you start using the DAO, it is important to understand your requirements and determine whether the DAO is the solution you are looking for. While DAO has great benefits, it may not be suitable for all types of projects. Understanding your goals, short - and long-term vision can help you understand how you want to build your DAO. Before releasing the DAO, the first factor worth evaluating is whether your business will really benefit from it.
2. Decide the type of DAO to build
There are many types of Dao, and which type you choose depends entirely on your specific needs and goals. Agreement Dao, Risk Dao, Media Dao, Entertainment Dao and Authorization Dao are some of them. Once you understand the type of DAO you choose based on your suitability for your business, you can move on to the next step.
3. DAO Token Allocation
Once you know what you plan to accomplish with your DAO and the type you want to build, you should consider the allocation of DAO tokens from a strategic perspective. Your decision should reflect your long-term vision and the relationship you will build with your community.
DAO tokens are useful for creating rewards and incentives that encourage voting on the direction of the DAO. Since tokens are the main reason for users to feel successful in participating and investing in the company, you should define the way you want to use tokens so that tokens can increase your goals and lead to success.
4. Determine the supply, distribution and reward of DAO tokens
When determining the supply of tokens, it is very important to find the best point so that your tokens can maximize their potential. For example, although low price cryptocurrencies have smaller trading volumes and lower monthly and quarterly returns, they have larger trading volumes because they have more coins.
However, the entire process of DAO allocation and provisioning depends on your specific goals and communities. One thing to remember is that if your token is a safe pledge, that is, a reasonable number, then your token has a higher trading opportunity. The next key aspect related to DAO tokens is to ensure that you strike a balance between rewarding your community and ensuring that your community vault has sufficient balance.
5. Build DAO
After completing all the above steps, it is time to build the DAO. When building your DAO, there are two methods: building your own system and using the DAO startup template and tools to achieve various functions. Such as establishing a legal framework, building tools, naming the DAO, and determining the team and founding members.
Some Ethereum tools worth using to build DAO structures include Colony, Syndicate, Aragon, DAO stack and Orca protocol. Building a DAO involves some steps, such as setting up a DAO and setting up a funding tool to manage large-scale operations of tokens, fundraising and funding.
6. Set up DAO treasury
It is important to manage the DAO funds for strategic investment and operational expenditure, which is why you should establish the DAO fund pool next after token supply and distribution. For the DAO, it is necessary to ensure the safety of the DAO's capital to prevent unilateral decisions on capital expenditure. To ensure this, you can use fund management tools, such as Multis, Superfluid, Coinshift, and Parcel.
Although it is possible to switch to different treasure tools at any time, it is better to choose the right tool from the beginning. When you choose the right national debt option, you can protect your funds and distribute them when necessary.
7. Build a community
Once the DAO is deployed and started, you should build a successful community, because it is this community that determines the success of your DAO. Therefore, it is important to take positive steps to build one. There are various tools available, including Twitter, Discard, Medium, Mirror, Telegram, and other tools for DAO communication.
These are the steps to start the DAO. Decentralized Autonomous Organization (DAO) is an entity without central leadership. Decisions are made from the bottom up and managed by communities organized around a set of specific rules implemented on the blockchain. Although Dao may be very beneficial and have room for future development, people first need to have a comprehensive understanding of blockchain and its working methods. In addition, to establish and start a DAO, you need to be familiar with the working methods of blockchain and how to use blockchain technology.