If you are new to crypto and the DAO concept, how can you distinguish DAO projects in such a diverse ecosystem?
There is no perfect system to sort it out, but this article will examine some of the most popular DAOs varieties based on what they are built for and how they are used.
Before we get into details, let’s cover some basic statistics.
How many DAOs exist?
We covered DAO statistics in full here, but let’s recap the fundament stats.
As of June 2023, more than 12,700 DAO organizations were recorded across the We3 ecosystem (source).
However, not all of these projects are active. Only 6,000 DAO projects have shown at least some activity (>= 1 proposal, proposal = idea that a community member wants the DAO to consider) as of June 2022 (source).
Note: This number is constantly changing, and various resources have different stats, with new projects being born and some shutting down.
First notable DAO project
In 2016, the crypto market saw the first DAO sensation. A blockchain-based investment fund, “The DAO,” raised over $150 million in crowdfunding.
But later that year, it encountered a controversial hacker attack and eventually shut down.
DAOs got more traction during the last crypto bull run that began in the middle of 2020 and lasted until late 2021.
The list of 9 common DAO project types
DAOs come in all shapes and sizes. Some DAO verticals are trending more than others.
- Protocol DAOs
- Investment DAOs
- Grants DAO
- Collector DAOs
- DAO Operation Systems
- Service DAOs
- Social DAOs
- Media DAOs
- SubDAOs
The decentralized finances category is where DAO theory applied the most, with 45% of projects spinning around DeFi protocols, investments, and grants.
» Extra read: How DAO projects get funded
Here is an excellent overview of the current DAO landscape by Cooper Turley:
As you can see DAO concept can be used in various organizations. To rest the DAOs type case, let’s get to the list and look at some successful use cases.
1. Protocol DAOs
These DAOs focus on developing and maintaining protocols or frameworks for specific functionalities or industries.
The main goal of a Protocol DAO is to create open and permissionless protocols that enable various applications and services to be built on top of them.
Notable protocol DAO examples:
- Uniswap – A popular decentralized exchange protocol built on the Ethereum blockchain. It enables users to trade cryptocurrencies directly from their digital wallets without intermediaries. Uniswap operates as a Protocol DAO, allowing users to provide liquidity to trading pools and earn fees in return.
- MakerDAO – A decentralized lending and stablecoin protocol on the Ethereum blockchain. It enables users to borrow and lend cryptocurrencies using over-collateralization. The protocol’s native stablecoin, DAI, maintains a peg to the US dollar through smart contract mechanisms.
2. Investment DAOs
These DAOs focus on investing in various assets or projects on behalf of their members.
They bring together a community of individuals who pool their resources and expertise to identify investment opportunities. Investment DAOs allow individuals to participate in investing practices, diversify risk, and potentially generate returns through a decentralized and community-driven approach.
Notable investment DAO examples:
- MetaCartel Ventures – Focuses on early-stage investments in blockchain and Web3 projects. MetaCartel Ventures aims to accelerate the growth of innovative projects in the decentralized ecosystem and contribute to the development of the broader Web3 community.
- The LAO (Limited Liability Autonomous Organization) – A pioneering Investment DAO that operates as a decentralized venture capital fund. It allows individuals to pool their funds and collectively invest in early-stage blockchain projects and digital assets.
3. Grants DAO
These DAOs provide financial support and resources to individuals or projects that align with their mission or goals.
Grants DAOs accept applications from individuals or teams seeking funding for research, development, or other initiatives. Through a decentralized decision-making process, the DAO members evaluate and approve grants based on innovation, impact, and alignment with the DAO’s objectives.
Notable grants DAO examples:
- Gitcoin Grants – Operates on the Ethereum blockchain. It provides a platform for funding open-source projects and initiatives within the blockchain and Web3 ecosystem. Through Gitcoin Grants, individuals and teams can submit project proposals and receive funding from the community.
- MolochDAO – Focuses on supporting projects and initiatives within the Ethereum ecosystem. MolochDAO allows individuals to pool funds together and collectively determine how those funds should be distributed as grants.
4. Collector DAOs
These DAOs primarily focus on collecting and curating digital assets, such as non-fungible tokens (NFTs), artwork, or other digital collectibles.
Collector DAOs aim to foster collaboration, discover rare or unique digital assets, and provide a platform for collectors to share their passion and knowledge with the community.
Notable collector DAO examples:
- Flamingo DAO – Focuses on acquiring and curating rare and valuable NFTs within the crypto art and digital collectibles space.
- PleasrDAO – Known for its high-profile acquisitions and collaborations within the NFT space. The DAO includes collectors who come together to acquire iconic and culturally significant NFTs, such as historic internet artifacts or exclusive digital art pieces.
5. Operation system DAOs
DAO Operation Systems, or DAO OS, are software platforms or frameworks designed to facilitate the management and operation of decentralized autonomous organizations (DAOs).
The purpose of DAO OS is to streamline and simplify the operational aspects of any DAOs, ensuring efficient and transparent management of decentralized communities.
Notable Operation system DAOs examples:
- Aragon – Provides a comprehensive suite of tools and smart contracts to create and manage decentralized organizations. The highly customizable platform supports many use cases, from small community-based organizations to large-scale decentralized enterprises.
- DAOstack – Provides a framework for creating DAOs and a set of modules that facilitate governance, proposal creation, voting mechanisms, and token economics. The platform aims to foster efficient coordination, consensus-building, and the emergence of new forms of decentralized governance structures.
6. Service DAOs
These organizations offer various services or products to their community or clients. Service DAOs can cover various sectors, including finance, insurance, healthcare, education, and more.
Service DAOs aim to provide efficient, cost-effective, and community-driven solutions that disrupt traditional centralized service models.
Notable service DAO examples:
- DXdao – Focuses on developing and maintaining decentralized financial (DeFi) products and services. It operates as a decentralized collective, with contributors and stakeholders collaborating to build and govern various DeFi applications.
- Raid Guild – Specializes in providing decentralized design and development services. It is a collective of skilled designers, developers, and other professionals who collaborate on projects related to blockchain technology and decentralized applications (dApps).
7. Social DAOs
Social DAOs focus on fostering social interactions, community building, and collaborative decision-making.
These DAOs aim to empower individuals, promote inclusivity, and facilitate the creation of social impact projects, cultural movements, or online communities in a decentralized and transparent manner.
Notable social DAO examples:
- Friends with Benefits (FWB) – Combines membership, community, and tokenomics to create a unique social network. It aims to unite creators, artists, and entrepreneurs to collaborate and share resources.
- Genesis DAO – Operates on the DAOstack platform. It is a community-driven organization that funds and supports blockchain and decentralized technology projects.
8. Media DAOs
These focus on creating, distributing, and monetizing media content decentralized and transparently.
These DAOs aim to democratize the media industry, promote creative freedom, and redefine the relationship between content creators and consumers by removing gatekeepers and facilitating direct peer-to-peer interactions.
Notable media DAO examples:
- Audius – Concentrates on empowering musicians and creators in the music industry. It provides a decentralized music streaming platform that allows artists to directly upload, distribute, and monetize their music without intermediaries.
- Rekt – Providing decentralized news and analysis for the cryptocurrency and blockchain industry. It operates as a community-driven platform where contributors share insights, research, and opinions on various projects, events, and trends in the crypto space.
9. SubDAOs
Subsidiary DAO is not a separate type of DAO but is worth mentioning. These projects operate within the governance framework of a parent DAO. They are like smaller entities or branches focusing on specific tasks or functions within the broader ecosystem.
For example, Compound Governance is a SubDAO within the broader Compound Finance ecosystem. It focuses on decentralized governance and decision-making for the lending and borrowing protocol.
Conclusion
In the fast-evolving landscape of blockchain and cryptocurrencies, Decentralized Autonomous Organizations (DAOs) have emerged as powerful vehicles for innovation, collaboration, and community-driven governance.
Throughout this article, we have explored nine major types of DAOs. Each type serves a specific purpose, leveraging the power of decentralization to redefine industries and empower individuals.