How to Create a DAO

DAOs are becoming popular governance models in the blockchain space. These organizations harness distributed ledger technology to foster a decentralized approach to decision-making. While most people understand this, a few remain in the dark. Thus, in this article, we’ll discuss the concept of DAO and how to create it.

Creating a DAO requires both technical knowledge and an engaged community. You must establish bylaws representing the founders’ vision, goals, culture, and code of conduct to get started. Also, you need the right set of tools to run your DAO, including a smart contract platform and token framework. Let’s find out in this article!

How to Create a DAO
How to Create a DAO. Image by natanaelginting on Freepik

What is a DAO?

DAO is the acronym for Decentralized Autonomous Organization. It is a type of organization governed by code, not upper management. It has become popular with the Ethereum blockchain project called “The DAO.”

A DAO is open, so anyone can participate if they meet certain organizations’ requirements. Also, all processes are automated using smart contracts, removing or reducing the need for human control and direction.

Moreover, the DAO attempts to leverage the decentralized nature of blockchain. This is to create a crowdfunding platform where each user has an equal share of voice and governance. Hence, it allows the community to decide how funds should be allocated within the organization.

Although this venture capital fund was met with initial success, it, unfortunately, succumbed to an attack. That’s because of the vulnerabilities in its code merely three weeks after its token sale began. Despite that, many other DAOs have been created since then. And they have been more successful at achieving their goals easier than traditional companies.

Why Must I Create a DAO?

DAOs have many advantages for crypto projects and represent a powerful tool for governance. First, they can use them to facilitate decentralized decision-making. This is possible through smart contracts, which are pieces of computer code that execute on-chain actions.

For example, if someone submits a proposal, the results could be on-chain and trigger a proposed change. This removes the need for humans to force decisions as they become embedded in the code itself.

Furthermore, another advantage of using DAOs is increased transparency and trustworthiness. With human interference removed from decision-making processes, there is less chance of rigging votes due to political or personal opinions. Besides, DAOs can help design spaces where identities remain anonymous during voting. This reduces the attractiveness of malicious actors who could create havoc in centralized systems.

How to Create a DAO?

Creating a DAO requires a specialized mechanism to ensure fair and secure governance. The most popular options available are the open-source solutions Aragon and Snapshot. They both provide reliable support across many blockchains.

Aragon’s vote and proposal system relies on Ethereum’s blockchain. Its governance framework enables organizations to create contracts and set up rules for members. They can also vote on revisions to existing law, manage their funds through token staking, and grant privileges.

On the other hand, Snapshot works over many blockchains. It’s one of the most convenient off-chain voting solutions due to its flexible design. Depending on your requirements, you can choose either of these mechanisms. They will provide roughly the same structure but differ in how they operate.

Further, some DAO systems use on-chain polling, while others prefer off-chain activities. Whichever you choose should be thoroughly researched before implementation to ensure it best suits your needs. Also, ensure you have enough transaction fees to deploy your DAO.


As we’ve seen, DAOs are an innovative way to create decentralized organizations that their members govern. They provide a new level of transparency, flexibility, and security that can benefit many types of businesses and communities. While creating a DAO can seem daunting, many resources are available to help you get started. By understanding the key concepts and following best practices, you can create a successful DAO that empowers your members and achieves your goals.

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