DAOs [4] • Types of DAOs
DAOs are a new way of organizing people. Traditionally, a company structure has been the most effective free-market approach to accruing talent in pursuit of a goal. That labor is usually persuaded and controlled through wages. DAOs seek similar ends — the creation of value — but rely on a decentralized framework in which workers, users, and other stakeholders have true ownership of the entity.
👉 Part 1: 5 Actionable Insights
👇 Part 4: Types of DAOs
Soon, there may be too many DAOs for classification to make much sense. After all, if you asked someone “what types of LLCs exist?” they’d probably find it tricky to answer the question. We may reach a point in the not too distant future when DAOs have equivalent variety.
For now, though, we can still delineate between types of DAOs. At a high-level, most DAOs are either technically-oriented or socially-oriented.
Technically-oriented DAOs tend to focus on building in the crypto space. They also tend to perform more of their actions on-chain.
Socially-oriented DAOs primarily exist to bring together groups of people, and find new ways for them to interact and convene. Governance is more likely to be off-chain, or non-existent.
Now, there is no hard line between these segments. Just as DAOs exist on a spectrum of decentralization and autonomy, they typically do so here, too.
For example, MakerDAO is fundamentally technically-oriented. But it has an extremely strong social component with high community engagement and interaction.
Friends with Benefits, meanwhile, is social by nature. It acts as a “cultural membership” and digital gathering point for artists, founders, and thinkers. Yet, it benefits from a robust product team that builds meaningful tools like event token-gating (“Gatekeeper”), dashboards (“Pulse”), and an editorial site (“WIP”).
On this spectrum, there are a number of subcategories worth unpacking. In particular, we’ll focus on: Protocol DAOs, Social DAOs, Investment DAOs, Grant DAOs, Service DAOs, Media DAOs, Creator DAOs, and Collector DAOs. (We told you we’d have to say DAOs a lot in this piece.)
Protocol DAOs
As the name suggests, Protocol DAOs are collaborative entities that exist to help build a protocol. An example is something like MakerDAO, discussed above. Rather than being built and governed entirely by a centralized team, the Maker protocol is orchestrated by the relevant DAO.
Indeed, over its years of operations, Maker has constructed a sophisticated structure of fifteen core units. Each unit has a mandate and a budget, managed by one or more Facilitators, that coordinate and pay contributors working to achieve a long-term goal within MakerDAO. Furthermore, each division is an independent structure governed by its own terms but that is still responsive to Maker holders.
Sushi, Uniswap, and Compound can also be considered Protocol DAOs, though each operates according to its own structure.
Social DAOs
Friends with Benefits (FWB) is a classic Social DAO, albeit with the engineering chops we mentioned. The goal here is to create a powerful community. In that respect, the end result is not dissimilar to other online hangouts, particularly those with walled gardens. (Some DAOs also focus on bridging online to offline, hosting IRL meet ups.) The difference, as we’ve discussed, is the conception of self-governance and ownership.
Seed Club, founded by contributor Jess Sloss, is another player in this space — albeit with a broad remit. CabinDAO and Bright Moments are two other examples.
Investment DAOs
If Social DAOs are primarily about the community, Investment DAOs are mostly about the returns. Similar to The DAO — that first, ill-fated investment entity — the goal of these projects is to aggregate capital and investors for deployment. Unlike traditional venture firms, decision-making is effectively democratic, with LPs voting on relevant opportunities.
Often, different investing DAOs will have different focuses. For example, one might specialize in purchasing ENS names, another might hone in on blockchain gaming, while a third could fund crypto startups.
The LAO, founded by contributor Aaron Wright, is a leader in this space. That parent entity has spun off a number of additional vehicles, including Flamingo and Neptune. MetaCartel is another notable Investment DAO.
Grant DAOs
In the piece mentioned above, Turley notes that many of the early DAOs were geared toward patronage, operating as Grant DAOs. Often, these exist ancillary to pre-existing projects, acting as a form of community galvanization. Through grants, these DAOs seek to advance the broader ecosystem, support promising projects, and open pathways to new web3 contributors.
For example, Uniswap operates Uniswap Grants, with Compound and Audius doing the same. Though functionally distinct from the parent entity, they’re nevertheless tied together by a sense of purpose, and often a common community.
Service DAOs
Service DAOs fill a unique position in the space. Specifically, these entities act as talent aggregators, pulling together human capital which can be directed towards certain projects.
For example, RaidGuild refers to itself as “the premier design and dev agency of the Web3 ecosystem.” Unlike a traditional agency, though, Raid doesn’t have formal employees or a corporate structure: it’s a DAO, instead. The Service DAO has worked with customers like 1Up World, Tellor, and Stake On Me.
PartyDAO, DAOhaus, Yam DAO, and many others fit this category.
Media DAOs
Forefront, Bankless, and DarkStar are Media DAOs. These entities produce public content, often collaboratively. Rewards from that content are shared across the group, while governance is also a communal affair. Stakeholders may help decide on topics to cover as well as managing resourcing.
Creator DAOs
If Media DAOs often focus around a publication, Creator DAOs center themselves around an individual. Just like some fan clubs give an influencer’s most passionate supporters opportunities for consumption and interaction, DAOs have the capacity to do the same. Beyond pure fandom, stakeholders can also actively contribute or work for an organization that supports the creators for whom they are most enthusiastic.
This is a less common construction at the moment, but may become more popular. We’ve seen a number of creators adopt “social tokens” through products like Roll, which lay the groundwork for true Creator DAOs. Early movers include Leaving Records and Personal Corner.
Collector DAOs
Though sharing some profit motivation with Investor DAOs, Collector DAOs ultimately orient themselves slightly differently. These entities unite contributors around certain assets, or collectibles. NFTs are a common choice.
While the accumulation of NFTs may also yield extremely favorable financial returns, these communities often have no intention of selling their items, at least in the short-to-medium term. The acquisition of NFTs and other collectibles also has a fundamentally different tenor — involvement is as much, or more, about fandom and affinity as it is about alpha.
These groups often take on the role of curators for certain projects, too, adding a kind of institutional longevity and support.
SquiggleDAO, for example, exists to support and collect generative art, while MeebitsDAO collects Meebits NFTs. PleasrDAO acts as an “art collecting empire” across projects. NounsDAO is the gathering point for holders of Noun NFTs, who receive a share in future Noun sales.
Of course, DAOs can exist beyond and between these categories. For example, Krause House is a DAO that is both an Investment vehicle and Social initiative: it was assembled with the goal of purchasing an NBA team, collectively.
As we look ahead, it’s worth reiterating that while the categories above are instructive, we are just at the beginning here. Many of the great DAOs to come will paint outside of these lines.
