Retroactive airdrops New protocols are designed to incentivize users further, such as airdrops to spread awareness, foster ownership, or reward early adopters retroactively. As an example, Uniswap awarded the UNI token retroactively to all users.

Use governance tools To enable DAO members to understand what it means to vote to reduce collateral/margin requirements or increase interest rates, several quantitative tools have emerged to visualize DAO risk (and possibly their protocols). Aave and Compound, for instance, hold billions of dollars in assets to backstop lending protocols. DAO... See more

Smart contracts assist participants in governing cooperatively in upcoming decentralized networks, drastically reducing coordination costs. DeFi and NFT communities face a major challenge in managing collective decision-making to optimize funds and operations. These revolutionary networks have aligned incentives and common interests without a... See more

Experiments paved the way for modern DAOs Early DAOs were collective investment vehicles designed to function like decentralized venture funds. Tokens represented voting rights and economic interests in the DAO. Every participant was rewarded on Ethereum for their contribution regardless of their contribution. DAO winter coincided with the bear... See more

Ways to run a DAO “How can our community accomplish these three tasks?” As DAOs mature, a growing ecosystem of companies and protocols aim to ease the load on DAO members by automating asset and parameter selection and monitoring. DAOs can reduce complexity and allocate resources more efficiently. Here are some steps they can take:

Growth incentives Compound, an on-chain lending protocol, decentralized itself in June 2020, with its core developers turning over the network's operation and ownership. Community members had control over the protocol's reserve assets generated by borrowers in a Compound Governance DAO. This was (at the time) the highest revenue generated by an... See more

Risk management To fund future operations, DAOs must manage their currency exposure. Some DeFi and NFT DAOs have treasuries worth hundreds of millions or billions. In addition to funding development and audits, these assets provide insurance if underlying protocols fail and are used for user acquisition and growth. To achieve these goals, DAOs... See more

The three key governance areas Growing DAOs will likely reach the point where their communities demand governance structures for all three key needs. Below, I share a more detailed breakdown of each of them to help builders/protocol developers identify where they will have to put their focus if they want to build a successful DAO.

Cultural DAOs and Gaming Guilds Although DeFi protocols have grown exponentially since financial incentives were developed, DAOs with token distribution models independent of usage and participation (unlike DeFi DAOs) are on the rise. I assisted in creating a commemorative video for Uniswap V3 by pplpleasr, née Emily Yang. Several DeFi developers... See more