DAOs, decentralized autonomous organizations, are community-led organizations with no central authority. They function similarly to grassroots movements, where a group of people with a shared mission come together. As far as the goals are concerned, the types of DAOs vary considerably. There are media DAOs like Bankless DAO, collector DAOs like FlamingoDAO, and protocol DAOs like MakerDAO, to name a few.
However, regardless of their types, DAOs must perform certain operations to run their organizations. To this end, they use a set of applications and software, which is known as DAO tooling.
Most of the operations are common among DAOs, and so are the types of tools they use. That’s why, in this article, we give a glimpse into typical DAO operations and the DAO tooling landscape.
Popular types of DAO tools
#1 Governance and voting
As their names suggest, DAOs must govern autonomously and in a decentralized way. Therefore decision-making is achieved by encoding rules in smart contracts, and proposals must undergo community voting.
DAOs can use on-chain or off-chain voting processes, while some DAOs prefer a mixture of the two. Off-chain votes – also known as signalling votes – indicate voters’ will without executing an action. Snapshot is the most popular off-chain voting tool. The platform offers various ways for token-based voting, including NFTs.
On-chain governance tools such as Tally and Sybil are also widespread. Tally allows DAOs to create proposals, vote, or delegate voting power. Sybil is a tool to discover accounts for delegating voting rights.
#2 Treasury management
DAOs need transparent processes for their asset management. Typically, all assets of a DAO are stored in one crypto wallet known as the treasury. Therefore, DAOs require multiple people to approve a transaction to prevent fraudulent activities that can be caused by the signature of one person. This is known as a multisig transaction. Numerous tools help DAOs enable multisig, such as Safe and Multis.
Another popular DAO asset management tool is the Juicebox protocol, a programmable treasury DAOs can use to configure token minting and crowdfunding.
#3 Community management
Discord, Telegram, and Twitter are the go-to tools for connecting with community members, but DAOs also leverage other tools to optimize different aspects of community management.
For instance, they can create and manage communities using gm.xyz and onboard users with Catapult. The know-your-customer (KYC) process provided by Fractal allows DAOs to ensure their members are humans and not bots, as well as ensure fair participation in airdrops and voting systems.
#4 Compensation Distribution
Some DAO tools are explicitly designed to reward members for their contributions. The most well-known among these is Coordinape which helps DAOs fairly distribute compensation, let community members reward each other, and define internal salaries.
Another popular compensation tool is Superfluid. DAOs use it to automize recurring and real-time payments. Another protocol for streaming payments is Sablier, while Utopia is a payroll management tool for DAOs, and Roll is a tool for bulk token distribution.
DAOs can also post bounties to reward members. Dework, Layer3, Kleoverse, and Gitcoin are some platforms to announce bounties.
# 5 Access control
DAOs with token-gated communities can use Guild.xyz to define community roles based on token holdings, manage whitelists, distribute POAPs, and create guess passes for members with no tokens. Collab.land enables the verification of assets on the Ethereum blockchain. DAOs integrate it into their official Discord and Telegram channels to verify ownership and assign access rights. The Grape protocol is another tool to grant access rights based on wallet balances; it’s designed for the Solana network.
The bottom line: other types of DAO tooling
While these tools represent the means to run most DAO operations, numerous others help fulfill other functions. Some of the most important parts of DAO tooling are also developer tools like Alchemy and Radicle and tax management tools like Accointing.
