Table of Contents:

• My Takeaways
• DAO Definition
• DAO Progression
• Three Important Benefits of DAOs
• Starting and Running a DAO
• How to Actually Build a DAO
• Legal Aspects
• SuperDAO

My Takeaways

My takeaways revolve around How to actually build a DAO and specifically – Platform DAOs. The Spiritual DAO strives to create an ecosystem of spiritual web 3 creators in which platforms will be given to those supported by the central umbrella.

With that in mind, I now recognize the importance of doing the following – 1 token, many NFT projects with next steps including:

1. Release tiered Astral Kingdom NFTs
   1. (Optional) Use revenue to grow community and offer another round of tiered Astral Kingdom NFTs
2. Private sale of fungible tokens to the investors
3. Public sale & airdrop fungible tokens to the community
4. Reward fungible tokens to community contributors
5. Revenue from fungible tokens and NFTs go towards developing projects (NFTs, Metaverse, Marketplace, Tarot)

A realization that Yury helped me find was that we don’t need thousands of community members to feel confident enough to release our NFTs. My goal is to release NFTs (at a discounted price) for core contributors that are currently in the community, then use those funds to market and grow the community to ~500 members. From there, we will release the next wave of tiered NFTs and follow the above-listed steps from there.

DAO definition

• Decentralized

  • No central core team

• Autonomous

  • Processes are coded in the software with or without humans

DAO Progression

First DAOs were for legal defense

Next was decentralized exchanges and token trading

Three important benefits of DAOs

• Fundraising

  • Sell tokens or promises of future tokens to investors publicly or privately
  • Long-term liquidity is high, causing high volatility investing to be common
  • 20-100 million market capitalization for seed stage vs 5-20 million for typical liquidity companies
  • Could raise money through NFTs as well

• Growth

  • Giving NFTs to community members, influencers, etc. who want us to succeed and we want all of us to succeed
  • Easier to give away tokens rather than going through centralized advertisement opportunities

• Employment

  • Hard to traditionally employ people
  • Crypto isn’t formally recognized as an employer, so it is a straightforward process
  • Employees can work part time, full time, project, retroactive payment, giveaways, tokens/NFT payments

Starting and Running a DAO

• Have a smart contract (DAO Frameworks)
  • Description of DAO on-chain
  • Tokens, commissions, voting rights, access rights, shared ownership, etc.
  • SuperDAO provides a framework which includes an NFT first framework
    • Suggests NFT release prior to FT
  • Create a smart contract
    • Want upgradability for the core team/technical partner to upgrade, extend, and improve with more items (SuperDAO does this – upgrades smart contracts weekly)
  • Have a list of members
    • Varying tiers (voting rights, revenue rights, etc.)
• Have DAO tooling (how team interacts with smart contracts)
  • Built in DAO management system
  • Treasury, news feed, compensation, spending center, payroll, etc.

How to actually build a DAO

• Majority/modern/standard way as of now – https://daostar.one/ was what Yury referenced
  • Start with NFTs
  • Create a single NFT collection representing membership into organization with multiple tiers (epic, legendary, gold, platinum) for influencers, etc. for project announcement
    • Airdrop advanced level NFTs for core contributors (key allies)
  • NFT sale for general public
    • Promise:
      • Governance benefits for key decisions/future product
      • Social benefits have access to private content/events and can see each other
      • Future project based benefits (right to consume future product in exclusive way)
    • Don’t promise:
      • Financial upside (reselling profit)
  • Introduce token
    • First, in a non-tradable way (can’t transfer it without team permission)
    • Find legit investors to privately sell tokens (PDF signed contract)
    • Send tokens to core contributors
    • Send tokens to external contributors based on hands-on effort (granted as a public payment)
  • Build product with money raised
    • List FT on decentralized exchange (uniswap) or centralized exchange (FTX/BNB/Coinbase, etc.)
    • Could exclude United States if team doubts legality
• Exceptions for certain categories requiring a different approach

  • Investment DAOs

    • 2 tier approach
      • NFT on top
      • Investment contracts on bottom
    • Start as a membership system club selling memberships only, don’t form a fund yet – sell tickets through NFTs, raise revenue through NFTs
      • NFT holders have access to club
      • There are operating budget/team who do most of the work
      • NFT holders have access to deal flow
        • Deal by deal investment or investors create a fund/investment contract that automatically invests in collectively decided upon investment opportunities
    • 1 club, many investment contracts

  • Platform DAOs

    • 2 tiered system (game, creator economy – spotify, youtube, publishing house, music label)
    • Groups of users create small businesses on your platform (like shopify)
    • Recommend 1 token, many NFT projects
    • Consider each mini-business as a mini-DAO with solely having NFTs, not fungible tokens
      • Split revenue between the parent platform and child-level DAO/business
        • Revenue goes to backing the token (buying back token – provide liquidity through market makers)
        • In return, the platform will use their own tokens to invest in individual platforms (grants)
      • It is very hard for each sub-business to introduce a token due to low trading size (won’t get listed on popular exchanges or get support on social media or get involved in DeFi landscape)
    • Example
      • Platform is metaverse project (Decentraland/The Sandbox) and sub-business is a metaverse development company (advertisement/land development/in-metaverse business)
      • Seed investment could be given from the metaverse project to the metaverse development company

  • Activist DAOs

    • Similar to investment DAO but with a twist
    • Want to make a difference in the world, sell NFTs to grow revenue, want to support projects by buying equity of the project
      • Coordinated group of investors who dictate how they want to buy/sell
      • They could take minority stake or could take over as board of directors to force changes that align with the activist mission
    • Buy and sells not based on pure profit

Legal aspects

• 2 approaches
  • Losing one (Legal wrapping)
    • Create legal entity the same as DAO that’s recognized in the country (Wyoming)
      • However, DAOs are too complex
        • Too many people, tokens, membership status, etc. to be recognized as an LLC
  • Winning one (Legal anchoring)
    • Create a subsidiary (legal entity not representing the DAO)
    • The legal subsidiary
      • Acquire off-chain property
      • Employment
      • Fiat bank account
      • Pass KYC checks
      • Contract law
      • Shield member responsibilities
• Cayman islands is $20-30k per year with a locked director
  • Could act as a DAO without any legal representation as well

SuperDAO

• Writes upgradable smart contracts for a multitude of different use cases
• Provide the member space (member directory, newsfeed, etc.)
• ETH and Polygon with possible SOL, BNB, Near, Algorand afterwards
• Legal folder
  • Smart contracts hold traditional legal documents
• Hope to launch 20 DAOs in Q1 through first come, first serve
• Have received over 2000 applications
• Hope to launch ~1000 DAOs in 2022 Q2