# The DAO Setup Guide For Humans By [Syn3sth3sia](https://paragraph.com/@syn3sth3sia) · 2023-03-16 --- Organizations built on blockchain, known as DAOs, have the potential to disrupt and improve the ways people organize and reach collective goals. However, for those of us who haven't already jumped on the Web3 bandwagon over the past decade, understanding DAOs can be a scramble. Even if we're not developers or economists, we can still tap into the massive potential of DAOs by contributing to one or summoning our own decentralized organization. The missing link for global adoption of this concept is a humanized narrative that resonates with non-tech individuals. One problem with current DAO knowledge sharing is that those who preach about it are often very technical in the areas of IT and economics. Due to its nature, the emergent Web 3 space, though comprising of some of the brightest minds I've ever encountered, eventually reveals itself as suffering from a massive curse of knowledge. This is why I created this guide: to help non-blockchain folks (like myself) understand the why and how of DAOs. I hope you find it useful and perhaps even start your own DAO around a collective of like-minded individuals. This earth needs a different way of organising, co-creating, and collaborating, and DAOs have the power to fulfill this dream and execute on the bold promise of a fairer world. Without further ado, let's dive into the topic. What is a DAO and why to create one? ------------------------------------ Before we move on to the toolstack itself, it is essential to understand what these mysterious DAOs are. DAOs stand for decentralised, autonomous organisation. This means there is some structure (organisation), lack of central management (autonomous) and some important things are kept on blockchain (decentralised). Simply said - DAOs are collectives of contributors who work towards a shared goal while sharing part of the value created. So it's just a group of people working together (and spending at least some of the time at their computers) towards a goal, regardless of where they're located, making sure people get a share of collective's success. ### Types of DAOs People getting together and working towards shared vision can be very powerful and proved so in history many times. Just as you can have many different collectives, depending on why people get together in the first place (mission, vision), there are many different types of DAOs that serve all the different purposes. Making profit does not have to be part of DAO's _raison d'etre_ but it usually is, as naturally people working together would create value that can be later distributed. Here are some examples of what a DAO objective can be: 1. provide services or products around blockchain 2. raise money to help build a co-living space 3. help one another get a job and grow professionally 4. invest in promising social projects 5. buy something that's out of reach for an individual but within reach for a community 6. run an educational program for those economically underserved 7. share knowledge and apply it by helping traditional businesses 8. create momentum for a breakthrough tech idea 9. raise funds for a startup (we're doing it with Meetra AI fundraising voyage) 10. help raise awareness towards more conscious living 11. look for UFOs as part of open source intelligence project 12. help plant trees in the Amazon The list could go on and on... Building Blocks of a DAO ------------------------ The one most important pillar of any DAO is the big "Why". Why do we want people to come together and collaborate or co-create? What is the world we're trying to build? Mission and Vision attempts to answer these questions. People get organised through internet these days. Even more so in the post-pandemic times, where everyone is used to communicate and work from separate, often far away locations. DAOs are governed by a community that uses communication platforms as their Agora. But what constitutes a successful DAO is people who contribute to it. Of course, as much as I'd love to have so many of my friends join the DAO and create a DAO of their own, it's still not a thing for everyone. It's still a bit technical, still using a lot of tools, even IT-friendly people are not familiar with and... it requires DAO members to use their computers quite a lot. Why ? Because communication between people is so important and most things can't be discussed on the phone or through SMS. ### Mission and Vision It's easy to understand Vision as a description of future reality we are imagining when our project - here a DAO - is successful. An example would be : _DAOs are culture and human interaction aware when building and maintaining decentralised teams. People are more connected with one another on a more human level. Teams increase their outputs 10x_ Mission are the things DAO members do on a daily basis, abstracted - e.g. _provide coaching and training to remote teams_ Mission and Vision for a DAO can be easily crafted in a simple brainstorming session following basic steps to take information out of people's heads and structure it to make most sense. I still remember leading such sessions for our incubees at MakerDAO Incubation Program. When done through a collective workshop, decent Mission and Vision statements could have been written within hours instead of days. ### Humans - 99% From the very start of an idea until full maturity, DAOs are People. It's about humans working together with some help of technology to keep things automated, safe and transparent. There is a clear goal, the community aspires to, proposed by the founding team. Humans are responsible for what happens in the DAO, how it collaborates internally and with the outside world. Humans are responsible for success or failure of a DAO. ##### Inviting the right people In the future, anyone will think of creating a DAO just like they're thinking of running a one person business. There will be best practices already established and with one click we'll be creating a fully functional DAO toolstack. People will be generally aware of what it’s like to work in a DAO and it will be easier to find collaborators. At any rate, we need to think over whom we'll be inviting to our DAO, otherwise they will disengage or get easily overwhelmed by the technical aspects of it. For the _genesis_ or founding team, Invite people, who: * are willing to spend a few hours a week at a desktop computer engaging in contributing * is interested in new ways of organizing * is open to a stack of tools they'll need to work with as part of contributor's life * communicates well over distance * can invest some time at least into bootstraping the idea (rewards won't probably come early on) After all, you decide what kind of members you are willing to invite so spend a moment designing your target audience. Like-minded individuals usually work best, so make sure to make your Mission & Vision clear, as it acts as a good filter for newcomers. ##### Courage is the key There are no Managers in the DAO. This is what made me scared and overwhelmed (and went on for a long time) in the past. You are responsible for finding out where you stand, where you want to go and what you need to get there. You also need to be social and have courage to reach out to people, get their opinions, make sense of their ideas, rants and answer questions. I'd call it candid communication. _Awaiting orders_ was what I did much of the time and it didn't get me anywhere. Too afraid to find my own spot within the community, presenting my skills and boldly moving forward in my crafted direction - was not easy. Remote work often leaves you without feedback from outside and you have to use deduction or wild guessing sometimes to move things forward. DAOs are a new world of co-creation - one that is built because everyone knows what they're good at and have a good outlook on the current situation and how to apply these skills. People will tell you what they think, but they won't tell you what to do. And for many people I've seen this is paralysing. You have to be a self-confident and often a very entrepreneurial person. ##### Embracing paradigm change For many people to change from reactive to proactive is a tough one. Most of us are not used to work in fully self-organising teams although the "teal wave" is on the rise. Contrary to popular belief, I think progressively top-down chain-of-command models will to a degree be replaced by self-organising molecule-like sustainable collectives. At least in the post corporate era where profit-oriented _orange_ meritocracy is the lifeblood of an organisation. If you haven’t read Frederic Laloux’s _Reinventing Organisations,_ this is where above colors are coming from. People, when engaged towards a goal bigger than themselves can do magical things. When that goal is one of making world a better place, most of us will subscribe and do their best. Those proactive will eventually pull the ones reactive regardless of personal limitations and beliefs held. ### Machines (The Remaining 1%) A DAO is organized around people doing work, taking decisions, communicating, and moving the funds around for different purposes. Because of some level of complexity that this way of organizing brings, a good tool stack that helps not hinders member performance is important. (SDT) Simple DAO Toolstack using available dApps ------------------------------------------------ This DAO Toolstack is a product of research for the [Audax Guild,](https://audax.red) a friendly Web3 Guild we are currently working on. The tools I decided to use are simple, have a UI for humans, and cause minimum friction when interacting with the blockchain part of the world. dApps, or decentralized apps, sit on the blockchain. For interacting with such applications, you will use a crypto wallet (like Metamask) rather than a login and password. Here's a visual map of dApps and tools I've been using. ![visual map audax tools](https://storage.googleapis.com/papyrus_images/0a95185d32e45e8e32a3a25242053e8d88caec6da92fe0b19d1f22b8f953c359.png) visual map audax tools ### Choosing the Blockchain for Treasury and Governance DAO governance involves people taking decisions by voting on proposals. Important decisions regarding treasury and moving funds, adding new members, and potentially much more are usually done on-chain, so there is a full history of what, how, and when decisions were made. This means you have these basic functionalities in one place, ready to use in the form of a Web3 decentralized app, where you use your crypto wallet to login, create proposals, and vote. There are multiple blockchains we can use when setting up a DAO treasury. Ethereum is the most popular one, however when it comes to transaction cost (gas fees) it's still rather expensive. That's why many DAOs choose other blockchains that are cheaper, such as: * Binance Smart Chain * Polygon Chain * Gnosis Chain * Arbitrum * Optimism With the core DAO I selected for this toolstack, you can use any of these blockchains. Transaction costs are cheaper and transactions are fast. #### Using dApps with Metamask To use dApps (decentralized apps), you need a compatible crypto wallet. Metamask is easy to use, so I recommend it. Get a Chrome extension, create your wallet, and remember to never share your secret passphrases with anyone. Every time you interact with a dApp, you either do the signing (no actual transaction) or creating smart contract transaction (using gas). Transactions cost money, e.g. on Ethereum blockchain they cost ETH, or on Polygon they cost MATIC. Gas uses the blockchain's native token. ### Community Management Again, people are everything. You want to engage your community to come forward and contribute. Contribution is really communication, some individual work, some team work, deliverables that push the DAO towards its goal. #### Synchronous Communication with Discord Synchronous communication means people interact in real-time. A Facebook Messenger thread or Telegram channel is an example of synchronous communication. We expect people to respond asap, likely having a conversation like the one in real life. Discord is the synchronous communication platform of choice for most, if not all, DAOs. Discord servers are the usual first point of a member's journey in the DAO. Unlike Slack, it is channel-oriented, free, user-friendly, and has a lot of integrations. Creating a server and inviting people to use it is the first step. Get Discord here: [https://discord.com](https://discord.com/) ##### Channel configuration Joining some existing servers might be a good way to check out how different communities organize their communication. This tutorial includes NFT gating (people with a special NFT in their wallet will get a specific role in Discord automatically). The Welcome section is designed for newcomers who have not yet received their soulbound membership NFT. Voyages are the various projects of the DAO, and they are only available to members. When configuring channels, the sky is the limit, but keep it simple and informative. Join Audax Server(link at the end of this article) to view the channel configuration first-hand! ##### Member Journey and Onboarding It's good to plan ahead for early interactions with the Discord server. What do you want people to see, do, or act on? A simple flowchart like the one below from Audax Guild can help organize members' journeys and ensure that people know what to do. ##### Bots and Pieces Bots help make things more intuitive on a Discord server, for example, by welcoming members and guiding them through the steps to familiarize themselves with and start contributing to a DAO. Here are the bots I use when Summoning a DAO: * StickyBot (for placing an information Sticky as needed as the bottommost message in a channel): [https://www.stickybot.info/](https://www.stickybot.info/) * WelcomerBot (For welcoming users): [https://welcomer.gg/](https://welcomer.gg/) * Guild.xyz Bot (for NFT gating): [https://guild.xyz](https://guild.xyz/) * ChronicleBot (for DAO calendar synchronisation) - this way members will know when and what meetings they can attend: [https://chroniclebot.com](https://chroniclebot.com/) #### Asynchronous Communication - Forum Most people have tried using a forum board at least once in their lives. Asynchronous communication means that people can interact with other people's posts when they feel like it. With Discord, this is difficult because messages quickly disappear from sight, and organizing information that we want to stick is not an easy task. After all, we want people to reply to a post, like a post, and sometimes participate in a quick voting poll. Post history needs to be clearly visible and organized into categories, so newcomers can easily understand what's been going on before they joined. Most DAOs use Discourse, an open-source implementation of a forum board. With a forum created, DAOs need forum moderators to assign roles or kick out spammers. In Audax Forum, it's the Genesis Team. #### Role Management Roles are important if we want to gatekeep the community and grant members access to exclusive information. We want people to have special privileges as DAO members and be able to see all the different Discord channels or just some, depending on their level of authority. ##### Membership NFTs through Unlock Protocol For Audax, I used soulbound membership NFTs (NFTs that cannot be transferred to another user). Generating a Lock and Keys is easy and straightforward with the Unlock Protocol dApp. Keys can be airdropped to users' wallets, or alternatively, prospective members can self-serve an NFT using a Stripe-like checkout interface. These NFTs will show up in compatible wallets (e.g., Metamask) and can also be displayed through the OpenSea NFT marketplace. Unlock Protocol dApp : [https://unlock-protocol.com](https://unlock-protocol.com) ##### Automated Discord Roles thorugh Guild.Xyz Guild.xyz is another dApp that serves as a role management interface for Discord. Once configured, it will grant certain roles on a Discord server once a user has received their NFT. To a new member, this means they will usually see more channels and can interact with them. A good example is granting access to a #guild-gatherings channel showing a Google Calendar with member-only meetings and huddles. Guild.xyz dApp : [https://guild.xyz](https://guild.xyz) #### Member Onboarding This is an important process. If you onboard new members well, they will be excited and start contributing (e.g., by being well-informed early on and joining one of the meetings). It's a good practice to create an onboarding strategy. For Audax, this is: 1. A new member joins Discord 2. Welcomer Bot welcomes them in the #welcome channel and asks them to install Metamask and introduce themselves in #introduce-yourself 3. One of the genesis (founding) team members takes over and schedules an introductory call with the newcomer 4. After the call, the user is airdropped an NFT or self-serves the NFT using the checkout process with Unlock Protocol 5. Through the #join-guild channel, a newcomer validates the NFT and advances to a Guild-Member role, seeing all the channels on Discord (This is how it works for Audax) 6. From here, they will see upcoming meetings and events, announcements, and whatever activity is there with all the different channels (e.g., quest channels) This strategy will, of course, be cumbersome with larger communities, but for smaller DAOs, it is a good start. We can always upgrade the onboarding process later on. ### Governance Governance in DAOs is about signaling important information and taking collective decisions, usually by means of democratised voting on proposals put forth by members of the community. Governance can be done on a forum or using a DAO Governance Portal (such as xDAO). The difference is that the latter uses blockchain to record proposals, decisions, and automate execution relating to the treasury. #### Proposals and Voting Proposals are the lifeblood of every DAO and exist in the context of the DAO's goals. Members post proposals to move the organization further towards its objectives. They usually have a naming convention that includes IP (Improvement Proposal) in the name. #### Treasury management (Blockchain kicks in) To make things fair, secure, and fully transparent, blockchain is used as a central ledger for managing the collective's on-chain proposals, voting sessions, and treasury management (e.g., for setting up different budgets, buying things, compensating work done, and more). Simple treasury fund flow for Audax Guild: ![Treasury Flow](https://storage.googleapis.com/papyrus_images/90194b7d9941add086af2633474e6d8d808c933306473b76bb76bba3891110c8.png) Treasury Flow This is as close as one can get to interacting with a blockchain using a simple DAO. Some basic IT skills are needed to perform simple operations, so the creators still need to tweak the UI to make it fully comprehensible for non-tech people. The xDAO part is as technical as it gets, but don't be intimidated. #### xDAO - the matured core stack xDAO is by far the simplest and yet quite powerful DAO governance engine. You still have to copy and paste contract addresses here and there, but it is already quite easy to understand. And with xDAO, we can achieve a lot. ![xDAO functionality chart](https://storage.googleapis.com/papyrus_images/2146f21a59126bf8836be2689044ea2348684a0b4e1247dcb728eca5b1202d4a.png) xDAO functionality chart This means there is a number of process flows we get out-of-box with xDao: * Member management * Treasury management * Proposals and Voting * Liquidity Provider Tokens (for founders and investors) * Making profit with DeFi (So DAO can e.g. stake crypto) * More out-of-box goodies we're not covering here These functionalities are automated by xDAO so once votes are cast in favor, related follow-up actions are automatic e.g. funds go to specific wallet or DeFi contract. These things in the good ol' world of finance (CeFi) are done using paper ledgers or Google Docs. Moving this stuff to blockchain makes everything fully transparent, secure and by default relies on democracy in terms of member voting. Summon an xDao here : [https://xdao.app](https://xdao.app) ### Work and Compensation DAOs reach goals as its members contribute together. Usually as the organisation is usually bootstrapped by its founders, investors and makes profit later on, its members are paid (compensated) for their contributions with tokens. These usually are DAO's native tokens (if it creates one) or stablecoins. Members can then swap stablecoins for real world currencies like USD, PLN or JPY using centralised exchanges like [Binance](https://binance.com) or [Coinbase](https://coinbase.com). This of course, if the DAO chooses to have a token which is never mandatory. Treasury can hold any major cryptocurrency. #### Coordinape Coordinape democratizes the way people get paid for work. There is a utility token called GIVE. Imagine team members working together on a bunch of tasks. After some period of time called an "epoch," users allocate their GIVE tokens to appreciate other members' tasks done. Based on the total number of received GIVE tokens, funds are moved to individual members' wallets from Coordinape's central vault. It's easy to imagine a proposal done in xDAO to move funds away from the treasury to the Coordinape vault to automate the process of payments. Coordinape: [https://coordinape.com](https://coordinape.com/) #### deWork - cutest Kanban out there deWork is a bounty management platform and a really good-looking Kanban Board. Usually, we need tools for project management as we reach DAO's goal by multiple members delivering bits and pieces of work. It's simple to set up, lets you create projects, spaces, and sections. Since it's a bounty platform too, it can be used to pay contributors too. deWork: [https://app.dework.xyz/](https://app.dework.xyz/) ##### What are bounties Bounties have long been associated with software developers and Web3. A task that someone is willing to pay money for is called a bounty. Here are some bounty ideas: * finding a security leak in software * writing this tutorial * digital painting an NFT * writing an article for publication * performing a routine role Bounties can be absolutely public, DAO-internal, or even team-internal. They are the best way to crowd-source a task to be done into a wider community. It is not uncommon for DAOs and Web3 projects to crowdsource task completion from wider audiences. Bounty money is called reward. Again, it's usually a project's native token or a stablecoin, less frequently a specific crypto like ETH (which is by nature volatile, depending on market movements). ### Presence and Outside Communication #### Twitter / Telegram Twitter and Telegram are the channels of choice for interactions with the wider community and potential DAO members. Twitter is an async communication, which implies the parent post and people commenting underneath it. Telegram, on the other hand, is a sync communicator, so it is fairly easy to get lost in the waterfall of comments, pasted links, and a flood of emojis. I'm not a fan of using sync communicators for anything else than real-time or near-real-time communication, but a lot of people are actually using both Twitter and Telegram. Picking at least one (my preference would be Twitter) is essential. Twitter: [https://twitter.com](https://twitter.com/) Telegram: [https://telegram.com](https://telegram.com/) #### Website / Landing It is a good practice for the DAO to have a concise yet informative world-facing representation. It can be a webpage, usually linking to Discord, a Notion site (easy to edit), or similar. Making it visually appealing can help those invited get more interested and join the Discord server to start the membership process. #### Notion A wiki-type notepad with a nice user interface, where pages can be shared publicly to serve as a landing site or a structured set of pages containing information we want people to go through. You won't go super artsy visually, but if you need a wiki for your DAO, Notion will be your good companion. Simple websites will also work without having to learn HTML or using web creators (where it's easy to get stuck on visual aspects). Get it here: [https://notion.com](https://notion.com/) ### Calendars and Events Meetings are the pulse of any team, any community. Connecting with other human beings is essential to build rapport and keep everyone in the loop. Having a Google Calendar dedicated to the DAO is a good first step. Here are some default meetings you can set up to get your members involved in the early days of the project: * Townhall or All-Hands recurring meeting - A meeting where any member can join and stay on top of the latest DAO developments * Workgroup-specific regular meeting - We call it 'huddle' in Audax * Community Call - a place for presenting ideas outside of the DAO to attract new members * Office Hours - a place, anyone can join and ask questions about the DAO Google Calendar: [https://calendar.google.com](https://calendar.google.com) #### Discord channels for events Because overinforming in the DAO is important, as underinformed members will disengage, Discord channels can be used to post meeting schedules. One useful BOT for this is called ChronicleBot. Invite it here to your Discord Server: [https://chroniclebot.com](https://chroniclebot.com/) Other important Ideas explained ------------------------------- ### Blockchain in the DAO Again and again - don't be afraid of Blockchain. It's just a bunch of smart contracts making sure the treasury is safe and any budget-related actions stay transparent. Use the UI to make proposals, vote, and keep things neat and tidy. Anything else can be discussed on Discord or in a Discourse Forum. ### On-chain and Off-chain There are 2 types of decision-making protocols in the DAO. One - informal polls and proposals and the other - formal polls (voting) and formal proposals. Formal usually means that voting information and results will be stored on blockchain (So we will use xDAO for that with this simple DAO stack). You reached the end of this article! ------------------------------------ Congratulations. I understand this was still a lot of reading and perhaps a challenge for those who are not familiar with Blockchain or dApps at all. But you made it and I’m proud of you. Instructions in this article will be helpful if you are planning to launch your own DAO. Please feel invited to reach out if there’s anything you want to ask including suggestions for improvements in this article. How to contact me: Discord : **synesthesia#5763** at [Audax](https://discord.gg/GTu6Mmy6) Server E-mail : [andrzej.dobrucki@gmail.com](mailto:andrzej.dobrucki@gmail.com) --- *Originally published on [Syn3sth3sia](https://paragraph.com/@syn3sth3sia/the-dao-setup-guide-for-humans)*