Top Decentralized Autonomous Organization (DAO) Projects to Watch in 2021
Decentralized autonomous organizations represent the ideal of decentralized business. They play a central role in decentralized finance, and could play an even larger role as DAO infrastructure becomes more capable and once-ignored stakeholders in finance act on a desire for greater governance.
A DAO is a blockchain-powered organization that relies on smart contracts to sustain itself. Though there may be some level of human intervention, the goal of a DAO is to be as decentralized as it possibly can be in its operations.
Decentralization serves several purposes. When designed intelligently, a network of smart contracts automatically executing operations based on certain conditions may be hyper-efficient. Using smart contracts rather than humans also reduces the long-term costs of maintaining a DAO.
Other benefits of DAOs include transparency, as blockchains document every transaction and there is no third party to obfuscate the nature of any given transaction. Lastly, DAOs are generally constructed in a democratic fashion, so participants in an organization have a direct say in some or all of the decisions that could direct the future of that organization.
DAOs are young, but they have the potential to impact not only the DeFi space, but organizations in a variety of different fields and industries.
Maker is one of the more well-known DAOs, and its Maker Protocol is governed by those who hold MKR governance tokens. The Maker Protocol, also known as the Multi-Collateral Dai System, is built upon the Ethereum blockchain. Dai is a dollar-pegged digital currency that users can earn by providing collateral to the MakerDAO ecosystem.
With a market cap of more than $582 million at the time of writing, MakerDAO’s MKR coin is among the most prominent governance tokens in the DAO space. Maker has received funding from the likes of Andreessen Horowitz, and is proof that a decentralized organizational structure can work—in this case, for the lending, borrowing, and saving of digital currency.
KyberDAO is a scion of the Kyber Network, an on-chain liquidity protocol enabling seamless cryptocurrency token swap. The KyberDAO launched in July, 2020, and allows those who hold KNC tokens to participate in decisions regarding how the Kyber Network functions.
The Kyber team set forth several proposed benefits of participating the KyberDAO, including incentivizing participation by rewarding KNC holders with ETH tokens, providing transparent governance, and putting stakeholders central to Kyber's development and long-term goals. The Kyber Network has a market cap of over $227 million at the time of writing.
Aragon is both a DAO and a building block for others to launch their own DAOs. It professes to give users the ability to “organize with anyone from anywhere” under the structure of a decentralized autonomous organization. It claims to be the platform for more than 1,500 DAOs to date, with those DAOs storing at least $350 million in combined assets.
Those who hold the ANT token can vote on decisions that affect the direction of the Aragon protocol, while they can also create or join Aragon-enabled DAOs. The Aragon Fundraising venture is aimed at allowing DAO participants to more easily access fundraising for their organization. Aragon has a market cap of more than $157 million at the time of writing.
Moloch, aside from being the god of child sacrifice (sheesh) is also a decentralized autonomous organization known as the Moloch DAO. This DAO has an interesting premise. Rather than allowing Moloch stakeholders to make a wide range of management decisions, it essentially gives them two options: to issue new stock to those who want to own stock in the Moloch DAO, and to destroy their own stock in exchange for the capital pool that the share of stock represents.
This is the fundamental blueprint for how share-based DAOs—rather than governance-based DAOs such as Maker, Kyber, and Aragon—work. The capital generated by investment in the Moloch DAO goes towards funding grants for Ethereum 2.0.
GnosisDAO is the recently-announced DAO from Gnosis, a protocol that assists developers in the DeFi space. GnosisDAO molds its governance around prediction markets, floating proposals to its decentralized governors based on what the markets are saying. The SAFE token will be used for governance of the DAO, while the DAO will have control over 150,000 ETH and 8 million GNO tokens.
MetaCartel follows the share-based DAO model, but has a different stated purpose than Moloch DAO. MetaCartel’s mission is to “give money to DAOs and scaling solutions”. It has a collective management structure but is open source, and participants in the MetaCartel network make various decisions regarding its operations—it is a DAO, after all. At its core, MetaCartel is an “ecosystem of creators and operators building decentralized applications (DApps)”.
Among the DAOs on the MetaCartel ecosystem is VentureDAO. It is a decentralized investment fund that operates for a profit, and invests in early stage ventures in the hope of making its decentralized management group a nice return.
Rocket is a decentralized autonomous organization where participants accept non-fungible tokens (NFTs) in exchange for either U.S. dollars or the dollar-pegged token DAI. NFTs cannot be easily exchanged for other tokens as cryptocurrencies such as Bitcoin and Ethereum can, and so Rocket provides a way for NFT owners to access liquidity without having to relinquish their NFT stake.
MetaFactory is an option for those who would like to try shopping on a community-owned platform. It is a marketplace where customers can buy hats, shirts, fannie packs, and even “yams jams”, but it aims to be much more than a retail site. Its goal is to crowdfund clothing and apparel creators, and to allow investors to benefit from the earnings through a decentralized platform.
Their hope is that MetaFactory and its offshoots will be a model for “Brand Factories” structured as DAOs.
Saint Fame is, in its current form, an internet-based “fashion house” currently shopping a of couple items. It is self-branded as “an experiment in speculative fashion”. Stakeholders in the Saint Fame DAO network purchased $FAME tokens, commissioned a designer to create a shirt, and then approved the design before the shirt went on sale. In this way, it is a communal, decentralized fashion house.
Users can redeem $FAME tokens for Saint Fame products.
Raid Guild is a “decentralized collective of mercenaries” whose mission is to help their clients build, de-bug, and otherwise improve their Web3 projects. Raid Guild is an open-source, decentralized network of web designers and developers who have a few Web3 projects under their belt, and aim to add to their portfolio in 2021. Raid Guild operates using the MetaCartel Network.
DAOstack aims to be a building block for those who want to build decentralized autonomous organizations for their own purposes. Using the DAOstack interface Alchemy, users can harness decentralized governance protocols and a pre-built interface in order to run their DAO. DAOstack presents several use cases for its platform, including decentralized grants, the decentralized management of physical spaces, and the formation of coalitions to be run in a decentralized manner.
MetaClan aims to combine the popularity of eSports and the demand for decentralized, user-owned services. It is a “crypto-native eSports DAO” with an on-chain treasury for processing transactions between participants in the DAO. The goal is to bring together those who work in the gaming industry—designers, technologists, developers, players—to build relationships and provide services through a decentralized network. A stated mission of MetaClan is to strengthen the gaming ecosystem on Web3.
Make sure to keep an eye out for moves from these and other decentralized autonomous organizations (DAOs) and protocols in 2021!
Decentralized autonomous organizations (DAOs) may be expected to improve with time. The supply of DAOs is growing at a breakneck pace, with a 660% increase in active DAOs between 2019 and September 2020.
As new DAOs pop up, those who develop them will learn: what users like, what the major hurdles to adoption are, what use cases DAOs can best serve, and more.
The potential for continued frustration with the status quo in 2021 could lead more and more consumers in all fields to demand greater ownership over the organizations that they participate in. This sentiment falls in line with the spirit of decentralized autonomous organizations, and could drive further creation of and participation in DAOs.