What is a DAO and what it means to work with one

The most important part of a DAO is the culture. This is almost like the constitution - a shared culture of what it means to be part of the DAO. I thought I’ll start the conversation of what it means to be in CR8R DAO by doing up this summary of summaries.

Basically, I summarised all the DAO related posts from TheReadingApe to give this essence of what is a DAO and what it means to be in one. Added a few thoughts of my own too. The most relevant one is the one from Talking Crypto Ep #62 with Cooper Turley.

References are given below.

  1. What is a DAO?

“DAOs are internet communities with a shared cap table and a bank account.” - Cooper Turley

  • The merger of social world and working world

  • Working with friends doing the things we love to make an impact on the world and get paid at the same time

  • The value of a DAO is not based on TVL like DeFi protocol

    • If you have a group of dedicated people who spend their time on the DAO every day attending community calls and improving the DAO, that itself is the value

    • The value can be derived financially using cashflow models, but the real value comes from the strength of the community

    • Sometimes not having a cash flow valuation will end up having a strong value because cash flow is just one part of a large equation

    • That being said, if we have actions or cash-flow that can be measured on-chain, the value of our tokens and the DAO will increase

  • Permissionless work

    • Flat hierarchy

    • There is no more taking instructions from higher-ups, though there might be a guideline

    • Respect is earned not bought

    • Permissionless work comes with greater responsibility, not less because there will be no one looking behind your back to see if your work is of standard.

  • Work that you are proud of

    • When there is no one looking, are you able to give your best because of personal pride in your work?
  1. Why is token an important part of DAO?
  • Token has an ownership element

    • This is the core premise that transforms a mere chat group into a more sophisticated vehicle with financial upside from the work contributed
  • Usage of tokens

    • Token gated access - need to hold a certain number of tokens before the user can access the community or channels

    • Access to NFT that cannot be bought but earned through participation

  • The “Crawl, Walk, Run” model for usage for tokens/NFT

    • Crawl - just giving tokens to the biggest fans for their support

    • Walk - explore a purposeful token to incentivize specific types of actions that are aligned with the DAO

    • Run - tie in with DeFi or staking protocols, airdrops of exclusive badges, NFTs

  1. Organising a DAO (from Cooper Turley)
  • The first hire of the DAO will be to have a key operator whose sole mission is to coordinate everyone in the DAO

  • They get a pretty generous salary and a token allocation for running the daily operation of the DAO

  • There will be a team lead meeting weekly, where the top representative of different divisions comes together to share with others what they are working with

  • The team leads are responsible for organizing within their own groups. They will be given a budget and the number of tokens to distribute to the people working with them

  • Every other week, there will be town halls to keep people informed of what is happening from a wider perspective

  • This arrangement worked across all the DAOs he had been with


  1. Alt Asset Allocation ep 54 - DAOs, NFTs, Social Tokens - A Crypto Landscape Update with Cooper Turley
  2. Bankless - The Creator Economy with Jesse Walden, Li Jin, Cooper Turley
  3. Zima Red ep 61: Jess Sloss - Creator revolution: social token incubator bringing the next billion into crypto
  4. Talking Crypto #62 - Coopahtroopa
  5. Bankless - Building A Decentralized Blackrock - Index Coop (SotN 7/27)

To me a big part of what makes a DAO great is the spirit of cooperation.

There’s a saying in Chinese about this:

It’s really easy to break 1 single chopstick, but when you bundle 100 of them together they become nearly indestructible. :slight_smile:

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Hopefully we don’t bundled them forcefully because that will not be cooperation but coercion :joy:

So characteristics of a great DAO:

  1. Embraces the spirit of cooperation. Group before self
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There is also this innate sense, and probable practice of the right to immediately exit culture inherent through many a DAO. That is, anyone who is not happy with the gradual evolution of a given DAO might easily “emigrate,” i.e. exit from that DAO.

Once DAO will have replaced the existing (nation) states as States-as-Services, that right to exit will be more important than the voice itself.

I want to accentuate that DAOs are also teaching us a sort of an individual governance as a person.

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Yup yup, it’s the idea behind sovereign individual as well, which I’m sure you’ve read. Very good point.