Turning up the pages of crypto history, we can conclude that 2020 was a year of DeFi, 2021 was a boom of NFTs, and 2022 has every chance to become a year of DAO – decentralized autonomous organizations. The adoption of DAO has skyrocketed for the past year, claiming more and more use cases for businesses.

​​Aaron Wright, a lawyer and co-founder of Flamingo DAO, which invests in NFTs and creative projects, likens DAOs to “a subreddit with a bank account.” “The energy of the Internet is swarmlike, but there’s no real productive way to channel that,” he says. “I believe DAOs are that answer.”

At the moment, I see DAO as one of the most easily accessible and fastest models to run a new business or test its hypothesis as well as to upscale an existing one. This organizational model tends to become effective in the format of attracting investments and consuming “a product connected to the particular DAO” before it enters the market. More and more projects come up with the idea of DAO, let’s review a couple of its use cases.

Business club

Within the goal to create a closed business club, DAO can be a solid platform for it. Key targets are acquiring a large number of participants and building processes that can enable participants to earn money within the club.

The annoying issue of such clubs is that, as a rule, management is usually concentrated in the hands of one person – the leader of the club, and the crucial decisions are made by him or her. In some other clubs there is a kind of council that makes such decisions, taking into account the wishes of the participants. This structure has many disadvantages when it is reviewed from a business perspective. The main ones are an annual fee, additional fixed costs (instead of having a profit from holding events); lack of transparency of the internal processes and the club's effectiveness; there is no possibility of selling your membership in the club. Of course, there are many more of them, I will focus on the above mentioned.

In its turn, DAO provides equal opportunities and distribution to all its members. As it is usually formed by like-minded people with mutual goals: most of them are connected with smart and fair management to go DeFi – set up and influence the earning flows.

So, what happens if you create a club based on DAO? The annual fee is transformed into a one-time entrance fee in the form of an NFT certificate. It guarantees participation in the distribution of income generated within the club, and if you get tired of being a member of the Club, you can sell your “entrance ticket”. And usually with profit – at a more expensive price than its original cost. The internal scoring system allows you to distribute income in accordance with the established rules, with the ability to remain anonymous. The rules or memorandum are also accepted by all members of the DAO, not just by the leader. And with the help of such platforms like Discord and smart contracts, there is an ability to build an idea that is absolutely transparent and understandable to everyone, while not leaving all the classic social attributes – networking, parties, training, travels and much more.

Metastartup

Let’s dive into a different example closer to the Web3 space. 

The widespread phenomenon of Agnostophobia, the fear of the unknown, stops many people from entrepreneurship or self-development. But I don’t expect to delve into psychology, I want to outline that DAO structures connecting Web2 and Web3 are offering a lower barrier to run a business, for instance, in Metaverse – we call it a Metastartup. 

Blockchain and DeFi are great helpers to set up a digital startup, and Metaverses provide the huge spaces and number of tools to launch and promote it. Create2Earn model is designed to minimize the fear of starting new things and encourage creators and entrepreneurs – Metastartupers – to make their bravest dreams come true. Metaverses are aggregating a variety of updated and Web3-tailored business models based on all the advantages of blockchain and MetaFi, and in the nearest future one can just enter such a Metaverse, develop its business relying on the most effective model with no Agnostophobia.

Implementing DAO in this setup can be a fair decision and opportunity for a Metastartuper to influence the development of Metaverse and get distributed income. To learn why it is game-changing in the blockchain field and entrepreneurship and have a look at the functionality of DAO, please read the Medium article here.