In crypto land, 2020 was all about DeFi. So far, 2021 has been about NFTs (hot jpeg summer anyone?)

2022 will be all about Community DAOs.

Community DAOs = DeFi infrastructure + NFT business models + Creative Humans

Crypto isn’t just a technology, it’s an internet-native economy. Revenue is tracked in ETH. Key decisions are made with community governance. Transactions are enforced on-chain through smart contracts. Treasuries are controlled via multi-sigs. And value is captured with tokens.

DAOs are the native corporate structure of these crypto economies.

Instead of being incorporated in Delaware or the Cayman Islands, DAOs are incorporated in Discord servers and blockchains. DAOs provide an internet-native way of pooling capital, making collective decisions, and capturing value.

The org structure of DAOs looks like modern day cooperatives, but over the next decade I believe their scale and impact will rival some of the world’s largest public companies.

These days, it seems like there’s a DAO for pretty much everything; Collecting NFTs. Socializing. Building software. E sports. Musicians. Media. Education. Funding public goods.

But what makes a “DAO” a DAO?

Although the purpose, scale, and sophistication of DAOs can vary, most include the same core components:

• Group chat. DAOs usually start off with someone saying “wouldn’t it be cool if…” and then adding a few frens to a Telegram group or Discord server.
• Treasury. The most common type of Community DAO collects blue-chip NFTs and stores them in a multi-sig. As we’ve seen with Party Bid, people love aping into NFTs with their frens. It’s an experience. Community DAOs can also bootstrap their treasury through a tokenized crowdfund. This enables the DAO to fill their treasury with ETH to spend on operations and growth.
• Token. As word gets out about how much fun your Community DAO is having, people start blowing up your DM’s begging you to let them in. At this point, many Community DAOs issue an ERC-20 token as a way to gate membership. Depending on the exclusivity of the Community DAO, membership can cost anywhere from a few dollars worth of ETH to a few mil.
• Governance. Community DAOs with valuable treasuries and hundreds of members need a way to make collective decisions. Usually, rough consensus is reached in the group chat (with emojis, ofc) and the governance vote is just a formality. But it’s fun to see who voted, how much voting power they have, and what they voted for. Also, most Community DAOs empower small, focused teams of 5 to 10 members to own specific workstreams instead of requiring a governance proposal for every smol decision.
• On-chain cash flow. This is the most nascent component of Community DAOs but also the most interesting. On-chain cash flow turns a fun group chat with your frens into a sustainable business. So far, the most common way to generate on-chain cash flow has been through NFT drops.

So, are these Community DAOs actually working?

Over the past few months, DAOs like Fingerprints and Flamingo have amassed five and six figure NFT collections.

DAOs like Bright Moments have sold millions worth of NFTs in minutes.

Rabbithole, Seed Club, Forefront, and FWB are becoming the premier on-ramps for the next wave of active contributors in crypto.

Some DAOs like NounsDAO just leave you thinking WTF.