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In this mini course, we’ll discuss the big picture of launching a DAO from A-Z.
As with any organization, in DAOs there is no “one-size-fits-all” approach. Your needs will change over time, so there is no perfect design to keep forever.
That said, there are learnings to be taken from the more than 3,800 DAOs launched on Aragon (and thousands of others beyond Aragon). There are common patterns that we see in DAOs that have “made it.” In this guide, we'll outline the approaches that the most successful DAOs have taken: starting simple, experimenting, changing as you go, and not doing all of this alone.
“I don’t know what I don’t know” is a common feeling for anyone starting a DAO. DAOs are new organization structures, so don’t expect to already know every step involved. And of course, there is still a lot to to be invented!
To begin with, it can help to have an overview of the common topics and choices you’ll need to make to set up your DAO.
If you are new to the topics of DAOs and crypto, you may want to start with introductory topics such as:
0.1 What is a DAO? Learn what's unique about these new types of organizations.
0.2 Why do DAOs run on blockchains? Understand why blockchains are the base layer of DAOs.
0.3 What is a wallet and how to use it? You’ll need a wallet in order to set up and participate in a DAO, so it's best to get one now!
Whether you’re starting from zero or evolving from an existing project, there are foundations to set first.
1.1 Forming your initial community - Many successful DAOs start by bringing the community together to align on the future direction from the very beginning. This could take the form of a hackathon or a series of workshops. The point is to begin working together, getting to know each other, and figuring out who is in your community. This forms a group of people with a sense of ownership, and you won’t have the whole weight on your shoulders. Remember the old quote: “If you want to go fast, go alone; if you want to go far, go together.”
1.2 Think deeply about membership - as the founding team of your DAO, you won’t be able to observe every member to make sure they’re doing work that aligns with your initial vision. So, it’s critical that you trust your fellow DAO members to make reasonable decisions and act in service of the DAO without a manager constantly telling them what to do. Defining who can become a member and what that process looks like is an important step to take while launching your DAO.
A few questions to consider:
1.3 Setting your mission, vision, and values - DAOs are purpose-led organizations. When you lack a single figurehead of a company, it’s even more critical to have a simple, clear purpose that guides the actions of your organization.
Many times, the mission of the DAO will define how your governance process should be set up. For example, is your DAO a small group of friends looking to collect cool NFTs? Then a wallet allowlist governance process may be best. Is your DAO large in mission and scope? A token may help bring people together. The purpose of your DAO will inform the design—not the other way around.
1.4 Define your DAO’s coordination operating system - Every organization has a different way of operating, so you’ll need to define this for your DAO. How do people work together? What kinds of working groups will they be, and how do they coordinate? Do you use Agile methods, or something else? If you don’t define your coordination operating system, you’ll get stuck trying to solve coordination problems rather than making progress on your goals.
1.5 Start building - A pattern of successful product DAOs is that they start by BUILDING their product first—not building their DAO! By starting out with what you build, you focus on the end (what you’re building), rather than the means to the end (your DAO). If you’re creating a social DAO, building the community would be the important thing to focus on here.
Now that you’re ready to create your DAO, you will need to make choices such as:
2.1 How to choose the right blockchain for your DAO? This is one of the most important considerations from the onset of creating your DAO.
2.2 How to set your governance? How will you make decisions? There are different roles for voters and voting mechanisms to choose from.
2.3 How to choose your governance thresholds? You will want to fine tune the quorum, pass rate, and voting period according to your circumstances.
2.4 How to mint your tokens? You will need to decide if you really need a token; this is not necessarily the only or best way to start a DAO. If you do, you will need to decide about the supply and distribution, which impact other topics like governance.
2.5 How to structure proposals and build proposal processes? How will members of your DAO make proposals to improve your DAO? You can set processes and culture to do this efficiently and effectively.
From here, you have the basics for your DAO to operate. You can begin experimenting and learning, and over time, may become interested in additional choices.
For token-based DAOs, learn how to mint governance tokens on the Aragon App:
For wallet-based DAOs, learn how to create a multisig on the Aragon App:
With your DAO up and running, you may be running into topics such as:
3.1 How to distribute your tokens? You may be exploring how to distribute your tokens in a way that incentives the community and creates engaged and fair governance, for example with the concept of the ‘fair launch’ and airdrops.
3.2 How to manage your DAO’s treasury? As you begin to accumulate significant funds, you’ll be looking both at how to give stability to your DAO with crypto fluctuations, as well as how to grow your assets.
3.3 How to choose your legal wrapper? You will need to figure out what legal protection your DAO and its members need, based on your context.
For these advanced topics, you may want to consult experts with hands-on experience in your context
It’s common when starting out to seek inspiration from the leading DAOs in your space. Perhaps you’ve been looking into Lido, Index Coop, and MakerDAO for your DeFi protocol, or Aavagotchi and Decentraland for your gaming guild. It’s important to keep in mind that these examples may not match your context, and many of them started with much simpler models. Your DAO does not need to be complex in order to begin—it should really be the opposite.
You can think of both the token and the governance models as products: starting with a complex product can create technical debt and make it harder to build on top of the product. Keep Gall’s law in mind—all successful complex systems started as simple systems.
In the Aragon App, you can start a simple DAO and evolve it as you go. For example, you can start with just a few multisig members and add more as your organization gets larger, and then pass a proposal to fit the size of your organization. Or, you can start by minting tokens and assigning them to a few wallets, and then minting more tokens later on.
You don’t need to get every detail exactly right before launching. It's better to test and iterate as you go, especially when your DAO is still small and the stakes are lower. It can be difficult to run tests when you have a large DAO, so experimenting when you’re still small is a good call.
Even when you are a larger DAO, you can also experiment on a smaller scale with a sub-group of your DAO. Maybe one team or guild can test out a governance implementation for you, and you can use those findings to determine your path forward.
You may want to use testnets to experiment without moving real assets and gas costs. For example, Ethereum has the Goerli tesnet and Polygon has the Mumbai testnet. You can claim test tokens to use on the testnets with those links.
A few details to test:
Building an experimentation culture from the beginning in your DAO is a recipe for resilience and continuous improvement in your ways of working!
It can be daunting to define your DAO up-front, especially if you feel the decisions taken today can have unforeseen consequences in the future. It may feel that you need to define how your DAO will be in future, when the context may be very different with more members and more resources.
First of all, it can be helpful to remember that it is possible to change your DAO design with the passing of a vote. (In order to make sure votes can be passed, remember to keep the principles of start simple, and experiment step by step!)
Secondly, you may want to build processes and culture of regularly reviewing your governance to reflect on what is working and experiment with new changes.
The way your DAO presents itself to the world will affect many things. Who will become interested in your DAO and decide to join? If you launch DAO tokens, who will likely purchase them? Which events will your DAO be part of? There are many elements of DAO life that are determined by your DAO’s branding.
A few things to consider:
For more on DAO branding, read our guide: How to build a DAO brand identity.
It can be difficult to reign in a documentation plan once your DAO is up and running. But decentralized organizations must have clear documentation standards and processes, so people operating around the world can coordinate most effectively.
Set up your documentation processes from the get-go for a smoother, simpler transition to decentralization.
Consider using a platform such as Notion or Google Drive to store documentation. Or, you may find that a separate platform works best for you. Or, for a web3-native platform, something like Skiff might be best.
It’s normal to feel alone while building a DAO. Because these organization types are so new, it’s common to be uncertain as to where to go for help. The good news is that there is an incredible community around the DAO space that are open to sharing and learning together.
A few places to consider starting:
We’re excited for you to begin your journey, and we’ll be supporting you along the way. Our mission is to make it easy, transparent, and secure for you to build a DAO and coordinate as a community.
You may want to try the Aragon App to build your DAO. With the simple setup and easy-to-use home base, the Aragon App is a great fit for many beginner DAOs. Watch this video to see a demo of building a DAO in less than 10 minutes on the App!
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