DAO Governance

A DAO governance model is a collection of regulations that define how the organization operates.

By participating in this DAO project, which deals with the allocation of liquidity, its management and re-investing, one acquires the right to share on the profits. DAO supports democratic, decentralized finance, all experts agree that the decentralized finance that will be the future trillion market.

• Membership for an unlimited time, with the purchase and holding of DAO tokens

• DAO token value increase through the DAO activities in C/D-EFI

• Authentic participation in the development of the DAO through democratic principle

Traditionally in DAO, you get dividends on the organization's investments. These are automatically paid to the members and investors via smart contract.

• DAO Token has a price of USD 500 when the DAO goes live

• The number of issued DAO tokens is limited to 25,000 pieces

• Target price of the DAO token in 5 years is USD 100,000

• Dividends approx. 100% per year

• Decisions for the dividend's payout are met quarterly (3 months)

DAO Treasury

At the heart of every DAO lies its treasury. The treasury holds the collective financial resources of the DAO, usually in the form of cryptocurrencies. Governed by smart contracts, these funds are often stored in a shared, multi-signature wallet. The funds are used to facilitate operations, invest in initiatives, and support the organization's overall growth. As these treasuries are decentralized and governed by the collective, efficient management of these funds is crucial to ensure a DAO’s sustainability and success. Effective treasury management requires a thoughtful mix of diversification, the use of Multisig-Wallets for security, and regular reporting for transparency. This introduces unique challenges, and hence, solutions have been developed to address them.

DAO technology gives us a way to manage a shared treasury of assets without trusting a third party. Depositing and withdrawing assets on the blockchain is an essential action for DAOs.

DAO Treasury Management

DAO has developed robust systems that balance operational needs, strategic investment, and financial security while maintaining the principles of decentralization.

Among the most effective strategies for DAO treasury management are diversification, centralization of all financial flows to one platform, and investing in growth opportunities.

To mitigate risk and generate sustainable returns, DAOs can spread their assets across different types of investments. This could mean investing in a mix of crypto assets, other DAO tokens, or even real-world assets.

Uniswap DAO, a decentralized cryptocurrency exchange that uses an automated liquidity protocol, is an example of a DAO investing in growth opportunities. The Uniswap DAO controls the protocol's treasury and uses a consensus voting mechanism to decide on fund allocations.

Multisig-Wallets secure your assets within a smart contract, with all transactions verifiable on-chain. No assets are stored in the browser, and no wallet provider is in charge of your private keys.

Despite facing legal and regulatory challenges, DAOs are adapting and evolving, with states like Vermont, Wyoming, and Tennessee introducing legislation to recognize DAOs as legal entities.

Types of DAOs

Types of DAOs depending on the sources of income to the DAO Treasury and the ways the Treasury can use that income

This approach to the legal qualification of organizations is valid for both Web2 and Web3 organizations, DAOs. There is, however, one important difference. As the assets of a Web3 organization are usually stored on-chain and are managed by a decentralized community of DAO members rather than directors and shareholders–like in Web2 organizations–they are called a ‘DAO Treasury’.

Thus, depending on the business model, or, in other words, the types of income to the DAO Treasury and methods of their disposal, all DAOs can be conventionally classified into the following types:

• Community / Protocol DAO

• Service DAO

• Investment DAO

The main goals of a Community / Protocol DAO is, firstly, to unite the community of contributors, creators, entrepreneurs, and other enthusiasts around a decentralized blockchain protocol. Secondly, The Community DAO or Protocol DAO has a goal of motivating (incentivizing) their ecosystem of contributors to support the work of the decentralized protocol, build their own decentralized applications on it, issue NFT, or pursue some other activity.

How Does a DAO Make Money?

Exploring Revenue Streams for Decentralized Organizations

Decentralized Autonomous Organizations (DAOs) are reshaping how projects and businesses operate and govern themselves in the blockchain space. As these entities grow in popularity, one common question arises: How does a DAO make money? Understanding the revenue mechanisms available to DAOs is crucial for anyone looking to start or invest in a DAO. Here, we explore the primary revenue streams that support these decentralized entities, distinguishing between common practices and more hypothetical scenarios.

Token Sales and Initial Coin Offerings (ICOs) One of the most effective ways a DAO can secure initial funding is through token sales or Initial Coin Offerings (ICOs). In this model, the DAO issues its own tokens to raise capital from early investors and supporters, utilizing smart contracts to automate the distribution and collection of funds. These tokens not only grant holders rights like voting on governance issues or claiming a share in future profits but also serve to incentivize engagement and investment from the community early in the DAO's lifecycle. For example, the DOM DAO has successfully leveraged this strategy to fund diverse blockchain projects, establishing a strong foundation for growth and operation.

While popular and foundational, this method comes with its challenges, such as navigating fluctuating market conditions and adhering to evolving regulatory frameworks. These factors make it essential for DAOs to approach token sales with a well-defined strategy and transparent communication to maintain trust and ensure compliance.

Staking and Yield Farming DAOs, particularly those in the decentralized finance (DeFi) sector, can bolster their financial health through staking and yield farming. These methods involve the DAO or its members locking up crypto assets in various protocols to earn rewards or interest. Staking refers to the process where assets are held in a cryptocurrency wallet to support the operations and security of a blockchain network, while yield farming involves leveraging different DeFi platforms to maximize return rates.

For instance, DOM DAO is well-known for employing these strategies effectively, allowing it to enhance its treasury assets significantly and secure a stable income flow. This not only aids in capital appreciation but also bolsters the DAO's liquidity and financial resilience, critical for long-term sustainability.

However, these strategies carry their own set of risks, such as exposure to highly volatile DeFi market conditions and potential vulnerabilities in smart contract execution, which need careful management. Despite these challenges, staking and yield farming remain popular practices within the DeFi community, providing substantial opportunities for DAOs to grow their financial bases and support their operational goals.

Partnerships and Collaborations (Hypothetical but plausible) While not universal, some DAOs may enter into partnerships and collaborations that can open up additional revenue streams. For instance, a DAO could collaborate with other blockchain projects or companies to provide specific services or share resources. These partnerships might involve joint ventures, shared projects, or even contractual agreements that benefit both entities financially. Although this approach depends heavily on the DAO's niche and network, it represents a viable and often lucrative opportunity.

Crowdfunding and Community Support Crowdfunding is a pivotal method through which DAOs can engage their communities to support various initiatives financially. Platforms like DFI are specifically designed to facilitate crowdfunding in a decentralized context, allowing DAOs to launch campaigns that directly involve and appeal to their communities. For instance, DFI Coin has hosted numerous successful funding rounds where community members contribute to projects they believe in, with funds often denominated in cryptocurrencies.

This method not only helps cover the costs of specific projects or general operational expenses but also strengthens the community's commitment to the DAO’s success. The transparent nature of blockchain-based crowdfunding platforms ensures that donors can see exactly how their contributions are being used, reinforcing trust and accountability within the community.

However, relying on crowdfunding can introduce challenges such as fluctuating income streams and the need for continuous engagement strategies to maintain donor interest and involvement. DAOs must carefully manage these campaigns to avoid overwhelming their communities while striving to meet funding goals.

Crowdfunding exemplifies the community-centric model of DAOs, leveraging collective support to foster growth and sustainability. By effectively utilizing this approach, DAOs can not only finance their initiatives but also deepen the sense of ownership and involvement among their members.

Services and Product Sales Some DAOs may generate revenue by offering proprietary services or products, adapting their business activities to their decentralized structure. For instance, a software development DAO could issue software licenses or offer subscription-based access to tools that it has developed. Another example could be a DAO in the creative sector selling digital art or NFTs directly to consumers or through online marketplaces.

This revenue model not only demonstrates the versatility of DAOs in engaging with traditional business activities but also highlights their ability to innovate in product delivery and customer interaction. For example, Async Art, a well-known DAO in the digital art space, utilizes blockchain to allow artists to create and collectors to own and trade programmable art uniquely.

While this model offers significant benefits such as direct access to markets and scalability, it also presents challenges like managing intellectual property rights in a decentralized environment and dealing with competitive pressures typical of the open market. Additionally, integrating these business activities with the DAO's governance and operational frameworks requires careful coordination to ensure that all actions reflect the community’s values and comply with decentralized protocols.

By effectively leveraging this model, DAOs can tap into diverse revenue streams while fostering a closer connection with their target markets and broadening their operational scope.