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Dao NFT Meaning - What Is a DAO and How Does It Benefit NFTs?

July 12, 2022

Crypto, NFT, DeFi, DAO; A lot of new words are being used when talking about Web3. Understanding the new vocabulary will also aid in understanding what is going on in this new landscape also known as the metaverse.

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What Is a DAO and How Do They Work?

DAO is the acronym that stands for: Decentralized Autonomous Organization. The idea of having things function in a decentralized way is one of the main ideas behind the metaverse. This means that if you are creating a DAO, you’re creating a corporation run by a group of people that have a shared goal and is governed by code rather than people. There is no hierarchy, no board of directors. So, who “sets the rules” you may wonder, well rules and regulations are created through smart contracts on the blockchain. These smart contracts are fully transparent meaning all actions taken by the organization are completely visible. It also enables organization to cut out a lot of the red tape and middlemen, as the smart contracts work on triggers.  

What are the different types of DAOs? 

There are several different types of DAOs. There are Social DAOs, which are collaborative platforms for social networking, say for artists that share similar values. There are Venture DAOs, which are more for investments in the DeFi sphere, where the DAO members can make investment decisions together.  Then there are Collector DAOs, in which members collectively buy NFTs based on their pool of funds. Entertainments DAOs, are more for the creative types that want to bring a creative project to life and there is also what is known as a Protocol DAO, which ultimately is a form of decentralized financial services. Here a member 

How Are DAOs and NFTs Connected? 

  • Collective Ownership – this means, enabling a group of people to collectively own a high-value NFT. 
  • Community governance – DAO’s can help NFTs in community governance. So for example you want your community to be part of decision making process. 
  • NFT Creator collectives – a collective (community) of NFT creators that help with community building, funding, etc. The NFTs work as a kind of collateral for the DAO’s tokens which one receives 

When you combine NFTs with a DAO, you can work together with your community to reach your goals and develop projects. 

Popular NFT DAOs

Some of the most popular NFT DAOs are:

APE DAO – which a Bored Apes collector started. He basically turned a Bored Ape into 1million fractioned pieces, which became DAO tokens. These tokes were then sold and basically enabled anyone to own a piece of this sought after NFT project. 

The Sol Shamans Project – created the Helping Dao, which is a combination of DAO and NFT mixed in with some GameFi. It offers the Sol community to put a certain % of their NFT token into a vault with the goal to do charitable things. The project is far more complex and has lots more to offer when it comes to understanding the power of DAOs. 

Uniswap - one of the biggest and most popular DAOs. It functions as a cryptocurrency exchange. Anyone can become a member by holding the UNI token, which enables voting rights on the way the organization is managed.

Conclusion

There is much to learn when it comes to the options that arise from a decentralized system. It could be that it will turn business structures as we have known them upside down, where every decision that’s made, every mission or goal that is pursued is decided upon by everyone. 

FAQ's

What is DAO and NFT?

DAO stands for a Decentralized Autonomous Organization. In most cases you need to use an NFT, which is a non-fungible token, to buy your way into the DAO. 

What is a NFT meaning?

NFT stands for non-fungible token. It’s a unique digital code that’s secured and stored on the blockchain. 

How does a DAO make money?

The DAO is a beneficial tool in supporting the growth of existing and emerging NFT projects. The DAO enables more people that share the same interest or goal to invest in said projects. At the end of the day money is made through dividends from investments made by the organization.