DAO – An Introduction

DAO or Decentralized Autonomous Organization is a open-source protocol on the blockchain that are based on rules written by members which execute automatically, hence eliminating human managing intermediaries. The regulations of the DAO are fed as software codes into the blockchain, which get executed automatically when the specified conditions are met. Both the code and the executed actions work on the blockchain, which is a distributed digital ledger, which cannot be easily compromised with due to their immutable nature and decentralized information distribution.

Purpose of Decentralized Autonomous Organization (DAO)

The main objective of a DAO is to disable human dependence in the corporate world and decrease unilateral decisions by giving power to the community members. Everything in a DAO happens through the execution of smart contracts. Since the code is open-source, anyone in the community can view and any changes done will be visible across the community.

Hence, the main purpose of a DAO is to manage a community without human interaction using automated programs. Since a DAO works by itself, the possibility of gathering a global community for a business with its powers increases. DAOs also allow more passive income generation options by creating more flexible work patterns.

List of DAOs for Enterprises

  • DAO Protocol – In a DAO protocol, community members govern the decentralized platform through voting consensus and smart contracts.
  • Investment DAO – In an investment DAO, support for pooling and other investment operations are provided for DeFi platforms.
  • Service DAO – In a service DAO, talent hunting and acquisition processes are regulated for individuals and crypto ventures.
  • Collector DAO – In a collector DAO, fractional and complete NFT ownership of collectibles are regulated by smart contracts.
  • Social DAO – In a social DAO, full support for decentralized social media and community interaction platforms is provided.
  • Media DAO – In a media DAO, updates are brought by news aggregators that work according to consumers’ interests.
  • Operating Systems – In this DAO, full-fledged support is provided for crypto businesses to build their own DAO protocols.

Fundamental Benefits of DAO Which Bring a Huge Impact

Automated Management

DAOs make it possible not to trust a human-based leadership group to make decisions. The organization can work seamlessly without the need of centralized decision-making authority.


As the community is widespread, a DAO cannot be shut down by any individual or agency unless its proposal wins the community’s votes after owning a large number of tokens.


People can view and verify the code of the DAO platform. Changes in the code can be made by everyone in the community, and they will get updated instantaneously.

Salient Features of DAO

DAO Native Tokens

The native tokens of the DAO will have the necessary utilities according to the number of tokens staked on the platform or supplied to the liquidity pool by a user.

Smart Contracts

In a DAO platform, smart contracts help in automatically executing transactions when preset conditions are met. These ensure no human is required to process the transactions between the two parties.

Blockchain Technology

The DAO platform is hosted on a blockchain, which ensures the security of the platform, manage the responsibilities of community, and NFTs can become part of the DAO platform transactions.

Main Working Models for a DAO Platform


The organizational employees behind the DAO platform need to work on come under this model. Their numbers here can be very low, and hence the possibility of company influence becomes less.


In the DAO platform, the role of members excelling in individual domains such as finance, engineering, and designing is paramount. These individuals earn for their contribution to the DAO platform.


Participation of individuals in a DAO decides how much they earn as the mechanism depends on how much value they bring to the platform by contributing to its activity.


This mechanism works based on offering rewards for playing games and trading in-game NFT assets, as opposed to the traditional gaming model. Such DAOs make hobby gaming a passive income option.


Here, rewards will be given for completing daily learning tasks, which offers a more inclusive learning experience. It is particularly useful if the individual’s contributions to the DAO are valuable.


A more popular option since the inception of cryptocurrencies, people now earn through investing in the crypto assets, as the growth of cryptocurrencies has been phenomenal in recent years.

Popular DAO Projects So Far


A platform owned and managed by community members, DAOhaus is a code-less platform where DAOs can be created and executed.


It is a platform based on providing digital employment, which has been managed by the community of the DAO.


It is a community-based platform working on Web3 services, including consultation, development, design, and marketing, derived from the MetaCartel network.

Proof of Humanity

A DAO based on social identity verification for humans on Ethereum, the platform that offers Universal Basic Income (UBI) tokens.


The platform focuses on funding Ethereum-based projects. All the funds generated by the platform are given away to inspiring ventures.

A Comparision Between Traditional Organizations and DAOs

Traditional Organizations Decentralized Autonomous Organizations
Up-down hierarchical structure Single-levelled structure
A few individual(s) can demand and revise the platform’s operations The whole community has a part in deciding changes in the platform
Most of the platform’s activities are in the confines of the organization All the activities are transparently visible to the whole community
Human-controlled platform, including any automation that may exist Fully automated platform which works based on smart contract codes

The Working of a Decentralized Autonomous Organization (DAOs)

A DAO platform works based on smart contracts which contain the rules framed by the community. Although the code can be developed by an individual or a group, any changes post deployment will only be decided by voting. Smart contracts with such functionality should be extensively tested. If someone tries to alter the logic beyond the smart contracts, they will fail.

Also, it would take someone a lot of influence to access funds since the treasury is also protected by smart contracts. The DAO platform can also be easily checked by the public, as it is open-source. With its decentralized nature, a DAO is owned by the community rather than a centralized group. So, every decision taken is based on the votes of the eligible members. The next step after creating smart contracts for the DAO is funding. Here anyone can participate and voting rights are given through native tokens of the DAO. These tokens provide buyers with voting rights, and further benefits are based on their holdings. The funding earned can help the platform to get its initial liquidity.

The final step is to deploy the DAO platform on the blockchain network, from where the community members plan how to move forward with the platform. Proposals are made on different aspects of regulations, whose implementation is solely based on voting results. After rules are drawn by smart contracts, changes can only be done through community discussion and voting.

NFTs and DAOs – How Do They Work Together?

While NFTs are digital products, DAOs are organizations. Creators create NFT items on the DAO, and the platform helps further operations. Due to its nature, the DAO owns the NFT after the artist makes them. The DAO buys the NFTs in exchange for the platform’s tokens, and NFTs here serve as collateral.

The value of the tokens is based on the NFT, and if illiquidity concerns arise, the NFTs can be traded to the stakeholders. In this way, the platform ensures that the tokens have some worth during their lifetime. The tokens, in addition to providing monetary value, also offer utilities, including governance rights.

How Does Blockchain App Factory Help in Developing Your DAO?

At Blockchain App Factory, our experts have been living with the emerging technology for a long time, which has made us quickly adapt to changes. With decentralized autonomous organizations, we intend to learn a lot more, as we are also focused on platforms that give power to users. Our development expertise includes excellence in design, coding, testing, smart contracts, and deployment. All the services we provide are based on your requirements and come at economical prices, which makes us a favorite in the blockchain industry. Our experts can assist you in all the steps and even help you post-deployment.

Services by Blockchain App Factory

  • Integration of DAO – Our experts can assist you with integrating a DAO protocol into your business platform. Our experience ensures that all your requirements will be included in the smart contracts without fail.
  • DAO Platform Development – We can develop excellent business platforms with built-in DAO protocols. They will fulfill all the needs of a DAO by adapting according to the primary application of the business platform.
  • DAO Dapps Development – We can create Dapps with DAO functionality that can achieve hardcore decentralization. Such DAO Dapps will be primarily based on community consensus for changes in their business and the platform.
  • DAO Blockchain Development – Our professionals can develop blockchains containing DAO protocols. Decentralization on a blockchain network can be achieved through DAOs, where the community plays an important role in defining all facets.
  • DAO-enabled NFT Platform Development – Our developers can create DAO-enabled NFT platforms which abide by the definition of decentralization. Such DAOs offer help to the platforms by implementing changes after careful consideration of all factors.
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