Different Types of DAOs
Before you choose a DAO to join, or create a DAO of your own, you need to decide on a type of DAO to start or join. There are many different types of DAO’s and ways to categorize them, but here are the main types of DAO’s and what they are used for.
Investment DAOs
Investment DAOs are DAOs that are focused on raising and investing cryptocurrency. These DAOs typically attract crypto-wealthy members who use their crypto currency to back startups or make investments for the purpose of increasing their net worth. Using DAO to do this, instead of a typical investment firm allows the members of the DAO to democratically choose where their capital will be invested.
Social DAOs
There are 2 kinds of DAOs that are considered social DAOs.
Organizations that allow users to contribute to a social cause, such as a DAO that is a charity or a DAO that raises capital to be contributed to a charity—or charities—that the members choose through the democratic process of the DAO.
There are also DAOs that focus on the building of a decentralized online social community. Unlike Facebook, Twitter and Tiktok with their wealthy CEOs and top-down censorship and content moderators, these social communities are owned and regulated by the members of the community. This is not to say they are a wild west of content and comments. The DAO is focused on building a community of like-minded people and usually has policies and processes in place to vote out members that are disruptive or behaving against the rules of their Social DAO. A social DAO also usually has an application process to screen members to assist in building a community of like-minded people.
Service DAOs
Service DAOS are business based and are used to develop and maintain a service or product. Rather than one person raising capital, hiring, and training workers and maintaining their company, a DAO business is delivering a service or developing a product for the financial benefit of every member. Unlike the Investment DAOs, the members of a service DAO possess relevant skills for the service or product, not just cryptocurrency to invest.
Gaming, NFTs, and Collectibles DAOs
Gaming Daos focus on maintaining and developing decentralized gaming platforms and even the creation of a game, its members typically consist of both gamers and developers/programmers. These members are passionate about their projects and creating games that they love.
NFT DAOs are focused on creating and trading different kinds of NFTs. NFTs are Non-fungible Tokens and are digital collectible items, Non-fungible means the item cannot be traded for another item with the same value. It is one-of-a-kind. A physical world example would be the Mona Lisa painting. There may be prints and copies but there is only one Mona Lisa painting. These NFTs can be digital art that is bought and sold, or digital music, digital trading cards, etc.
Collectible DAOs are DAOs that are focused on purchasing physical collectible assets, often of very high value. Like in my example of the Mona Lisa painting above, a Collective DAO could be formed to raise funds to purchase the Mona Lisa painting (if it was able to be purchased). The DAO members would collectively own the painting and collectively and democratically decide where and how it was to be stored and/or displayed.
These types of DAOs are only the foremost examples of the different kinds of DAOs. There are others, less well-know and less used. Next time we’ll cover how you can find a DAO to join, or how you can create your own DAO and invite others to join you in pursuing your goals and passions.