How to launch a DAO: meta overview

In this meta overview, 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.

Overview of steps involved in launching your DAO

“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.

Getting context

If you are new to the topics of DAOs and crypto, you may want to start with introductory topics such as:

0.1 What are DAOs? Check out the Aragon DAO Education portal for an overview.

0.2 What is a wallet and how to use it? You’ll need a wallet in order to set up and participate in a DAO.

Setting the bases

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:

  • How will you screen potential new members? Is it a free-for-all, a more deliberate hiring process with interviews, or something in between?
  • Is there a difference between token-holders and members?

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.

Begin defining your starter DAO

Now that you’re ready to create your DAO, you will need to make choices such as:

2.1 How to set your governance? How will you make decisions? There are different roles for voters and voting mechanisms to choose from.

2.2 How to choose your governance thresholds?  You will want to fine tune the quorum, pass rate, and voting period according to your circumstances.

2.3 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.

2.4 How to mint your token? 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.

Advanced DAO Guides

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. Guide coming soon.

3.2 How to do a token sale? You may be exploring how to use decentralized exchanges and balancer pools to run an initial sale. Guide coming soon.

3.3 How to progressively decentralize? While some DAOs begin very decentralized, many others slowly cede more and more direct control of decisions to the DAO over time as the community matures. More on this in the ‘How to start simply’ section. Guide coming soon.

3.4 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. Guide coming soon.

ARAGON EXPERTS
For these advanced topics, you may want to consult experts with hands-on experience in your context

Starting simple - how to make your starter DAO

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 order to get started, consider a simple structure. For example, in Aragon Client, you can begin with the common organization templates, such as Company (token-based voting), Members (for cooperatives and clubs), or Multsig (a few central signers representing the community).

Experimentation leads to success

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 Rinkeby testnet (https://faucet.rinkeby.io/) and Polygon has the Mumbai testnet (https://faucet.polygon.technology/). You can claim fake tokens to use on the testnets with those links.

A few details to test:

  • Voting type: Which works best for your case? How is the mechanism affecting the type of decisions that are being made?
  • Voting period: How long does it take to get a solid number of participants voting?
  • Quorum level: What’s a good average participation level to set your quorum at?
  • Proposal process: How do you move a proposal from ideation to shipping?
  • Token distribution: Does the distribution affect vote participation?
  • Membership: How do you define membership in your DAO? Who is and isn’t a member?
  • Tools: Which communication, documentation, and voting platforms work best for you and your community? For more on DAO tooling, read our guide: How to build a DAO tooling stack.

Building an experimentation culture from the beginning in your DAO is a recipe for resilience and continuous improvement in your ways of working!

Changing your DAO as your situation changes

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.

Consider the brand and voice of your DAO

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:

  • What visual components will you use to represent your DAO? Colors, fonts, images, logos?
  • What tone of voice does your DAO use when interacting with the world? How do you want your DAO to come across as an entity?
  • If your DAO was a person, what type of person would it be?

For more on DAO branding, read our guide: How to build a DAO brand identity.

Document your processes early and often

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.

You are not alone - how to learn and grow as a community

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:

  • If you are new to web3, you may want to join communities specifically oriented towards learning, such as Rabbithole, Buildspace, or Kernel.
  • Find DAOs with similarities to yours, reach out to them, join their communities, and learn with them. Peer-to-peer learning with people interested in the same topics as you is the number one way to learn your way to success!
  • Find other DAO builders using Aragon. With more than 3,800 DAOs built on Aragon, there are plenty of people trying to exchange with for both more technical and conceptual learning. Join us on Discord with more than 8,000 members, and look out for the Support channel for any technical help needed to configure Aragon tools.
  • Reach out to DAO Experts. If you want to hire an expert to help build your DAO, we've partnered with service providers specializing in advanced DAO topics ranging from developer teams to legal specialists to tokenomics experts and more. You can find them on our DAO Experts page.

We’ll be rooting for you!

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. Dive deeper into DAOs here.

This guide was last updated in August 2022. Since the DAO space is continuously evolving, we're regularly updating the guides and adding new ones.
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