DAO or Decentralized Autonomous Organization. Spurred by their capabilities, DAOs are increasingly becoming popular in the digital world. and it is related to NFT a lot. If you do not know about NFT and DAO, read “What is an NFT ” and “What is a DAO” at first.
What has DAO got to do with NFT? The short answer? A lot.
DAO related NFT ?
One way DAOs help the NFT industry is in collective ownership of an asset. Usually, investing in NFTs, especially blue-chip projects, requires significant capital. Of course, not everyone can afford this. Thus, some DAOs were established to allow a group of people to collectively own a high-value NFT without shelling out thousands of dollars.
Another key area where Decentralized Autonomous Organizations help NFTs is a great means for fans and creators of an NFT project to come together and decide its future.
Some Decentralized Autonomous Organizations are also created by the community and not the project itself. A typical example is MeebitsDAO set up by community members of Larva Labs’ Meebits NFT project. Via the DAO, the community aims to build a metaverse for the avatars. For this, the organization will use all the collected funds to buy virtual land in various metaverses.
To join the organization, one has to purchase the ‘General Membership NFT’. The token also allows holders to participate in projects and governance, thereby building the future of the Meebits ecosystem.
A strong community backing is essential for an NFT project’s success. For popular artists and celebrities that already have a following, community building is a walk in the park. However, that’s not the case for emerging artists. This is where NFT creator collectives governed by DAOs come into the picture. Essentially, these are a collective of NFT creators that helps to raise funds, marketing, community building, and more.
Typically, artists have to sell their NFT to the DAO in exchange for the DAO’s tokens. The NFTs, in a way, work as collateral for the issued tokens and give the token value. Additionally, token holders get voting rights in the organization. An example is WHALE, a social token backed by The Vault—the platform’s NFT art collection. A DAO governs the Vault, whose members hold the WHALE tokens and contribute to the project’s growth.
NFTs and DAOs coexist
Here are some of the most popular DAO related NFT and NFT DAOs :
APE DAO was started by Bored Apes collector Kylo.eth. They fractionalized 49 BAYC NFTs and a female CryptoPunk into 1,000,000 APED tokens to launch the NFT DAO in June this year. With this, anyone could own parts of these highly sought-after NFTs. The Decentralized Autonomous Organization was a great success with the tokens selling out in just four days! Soon after, DAO members donated more NFTs, including CyberKongz, Avastar, Punk’s Comic, and more. Furthermore, the community governs the DAO through $APED shards.
YGG DAO focuses on in-game assets from blockchain and NFT games. Currently, Yield Guild’s three co-founders manage all the assets. Furthermore, YGG issues the ‘YGG token’ for members. Token holders can vote on “decisions related to the guild’s business and governance” and participate in DAO-related activities.
SharkDAO brings together a group of strangers to pool together funds to acquire rare NFTs. However, it focuses only on Nouns, a generative art NFT project. So far, SharkDAO has acquired 5 nouns and has 400 members (or as they call it, ‘Sharks’), together raising 1000 ETH. Here, members will receive SHARK tokens in exchange for ETH. With this token, members can vote and “steer the mission” and how they “deploy resources”.
Jenny Metaverse DAO
Jenny Metaverse DAO, set up on the Unicly platform, acquires NFTs and stores them in a vault. Additionally, the native uJENNY token represents the NFTs. As with WHALE, those who hold the token holders get governance rights and can vote on decisions such as releasing NFTs from the vault, acquiring NFTs, and more.
The future of decentralized organizations
Clearly, DAOs have a number of use-cases within the NFT industry. In the coming months and years, these use cases are only going to grow. Moreover, their vision of an organization owned and managed by its members could one day even replace some traditional organizations. In the future, Decentralized Autonomous Organizations could also become a must-have for NFT projects.