What Are The 5 Types Of DAOs?

Posted by Olivia Smith on April 2nd, 2022

There are different types of DAO. Here, we will look at the different categories that a decentralized autonomous organization can fall into, based on its mode of operation, structure, and even technology. Here is a few of them. You have probably heard some of these names:

1. DeFi Protocol DAO

These DAOs use smart contract protocols to bring DeFi (decentralized financial) services to their users. They use tokens as voting means to implement the protocol and financial changes. Examples of DAOs under here are Uniswap, Aave, Maker DAO, and Olympus DAO. Most of these DAOs manage billions of dollars.

Founded in 2014, Maker DAO was one of the first protocols ever. It is a decentralized organization on the Ethereum blockchain that allows the lending and borrowing of cryptocurrencies without an intermediary or a middle man.

Maker DAO issues a stable coin called DAI. DAI is one of the top stable coins in cryptocurrency whose value is pegged to USD.

Maker DAO has another token called the MKR token. These token-holders are responsible for governing the Maker protocol, which includes adjusting the Dai stable coin policy. Simply put, the MKR token represents “shares” in the DAO.

2. Investment DAO

Here, a group of people, let’s call them investors, pool their money together and make investment decisions. These decisions could include investing in start-ups or artworks. Investment DAOs support capital pooling for various DeFi operations. Examples of Investment DAOs include the Meta Cartel DAO, a community made up of people who want to invest in new projects built on the Ethereum blockchain. Instead of investing one by one, they want to come together with their resources, which in this case is money, and then share ideas on how to make more informed financial decisions.

Other examples of Investment DAOs are the LAO, Friends with benefits, etc.

3. Grant/Launchpad DAO

In a grant DAO, members of the community donate funds into the grant pool, and they vote on how to allocate and distribute the funds. These DAOs are in charge of funding new innovative DeFi projects. The organizations that need funding just need to submit applications. An excellent example of a Grant DAO is the Moloch DAO. The tokens are used to vote on capital allocation. Other examples are Gitcoin and Seedify.

4. Collector DAO

I wasn’t sure whether to categorize it under ‘Investment DAO’ or leave it as it is. We will call it a sub-category of investment DAOs. This organization focuses on the purchase of non-fungible tokens (NFTs) or other artworks and collectibles. The market for NFTs has exploded recently and it’s only right for people to explore it. An example of the collector DAO is the Pleasr DAO. The Pleasr DAO recently spent million to purchase the sole copy of Wu-Tang Clan’s album “Once upon a time in Shaolin”. Pleasr DAO also has a reputation for purchasing the Doge meme NFT. Other examples of Collector DAOs are Flamingo DAO, Mutant cats DAO and also the Constitution DAO. BTW, don’t underestimate the “childish” style of their websites. They have millions of dollars.

5. Social DAO

These are platforms for social interactions and social networking. Examples include Friends With Benefits, Ape DAO, and even Decentraland DAO.

Source: https://medium.datadriveninvestor.com/dao-101-all-you-need-to-know-about-daos-275060016663

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