What is NFT DAO and Why You Need to Know About Them

In this guide, you will learn about NFT DAO: the correlation between non-fungible tokens and DAOs. And, how you can benefit from them! 

As someone who is thinking about launching their own NFT project or even joining a community, there are things to know. You have to learn how to make the best of all the NFT and crypto technology available to your hands. How to fulfill your potential to the fullest and, most importantly, make the best profit. So, keep reading to find out more about the world of open source frameworks, decentralized applications, and NFTs.

NFT DAO

NFT DAO GFX 1 - ChainWitcher

What is DAO?

Before we get into NFT DAO, we have to define what DAO is! We already know what NFTs are and how they work. If you feel like you need more information on NFTs, just click here for a more comprehensive guide. 

So, what is DAO? DAO is an acronym for Decentralized Autonomous Organization or a community-led group of people with absolutely no hierarchy. This means that they have their own rules and make decisions by voting unanimously. Kinda like a company but there are no head executives or an executive board. It is completely anonymous and there are no leaders or central authority. 

How do They Work?

NFT DAO - Blockchains - ChainWitcher

NFT DAOs and DAOs generally use smart contracts where the outcome of a vote puts a code in motion. Voting power is distributed according to the number of tokens each user holds. They vote on things like the organization’s future, utilizing funds, and more. To create a DAO you will need the following:

  • Smart Contracts: a digital contract that has all the rules of the organizations and gives its purpose. It is also the code that puts decisions into action
  • Fundraising: No organization can start without proper funds. So, members of the DAO itself raise money from their shared cache in exchange for a stake. Therefore, members buy certain amounts of the top DAO token
  • Release: Finally, you’ll going to need to deploy the NFT DAO into action! You place the DAO code on the blockchain and make it official! Original developers are no longer in control. Only stakeholders of the DAO can vote to change it

The only thing that binds these members together is a common goal – increasing the value of their holdings. But, how does this ultimately affects NFTs?

The NFT DAO Connection

NFT DAO - Blockchains - ChainWitcher

Collectors
One of the biggest applications of NFT DAO is collector DAOs. This is when an organization creates a fund to acquire or invest in NFTs. This is especially true for NFTs that are extremely expensive like the 91.8 million dollars NFT!

Therefore, an NFT DAO allows multiple users to own pieces of a whole NFT. this means that multiple users own a fraction of the same non-fungible token or digital asset. 

Community Governance
Another form of non-fungible DAOs is community governance via NFT projects. This is when certain NFT projects offer community governance as a type of NFT utility. Community governance gives members and creators of a project the right to collaboratively make decisions and contribute to roadmaps. 

Build a Dedicated Community
Finally, an additional perk of NFT DAO is building a dedicated NFT community. It helps potential creators and small projects to grow and build a community. A lot of projects can not build a community and grow hype right from the start.

Therefore, DAOs help raise funds and engage communities to grow a certain project. This way, a lot of small creators have the ability to show off their true potential and ultimately make a profit!

Popular DAOs

Blockchain 3 - ChainWitcher

Bored Apes DAO

One of the most popular NFT DAO is the APE DAO founded by Bored Apes collector Kylo.eth. The organization fractionalized 49 BAYC NFTs and a CryptoPunk into 1,000,000 APED tokens. So, as part of this DAO, you could own any parts of these NFTs.

ApeCoin became Yuga Labs’ upcoming metaverse project – The Otherside – native coin! This also means that both Yuga Labs and the creators of BAYC have linked the two projects together. But, since it is all a decentralized autonomous organization, it is community governed. So, everyone who holds APE is automatically a part of it. They can even submit proposals and vote on various ideas.

Decentraland DAO

Decentraland is basically a bunch of virtual lands where users have the ability to vote based on how much virtual property they own. It brings together the concepts of homeowners and completely decentralized city planning. The Metaverse Group actually bought a plot of land in the Decentraverse in 2021 for approximately $2.43 million dollars!

NFT DAO - Blockchains - ChainWitcher

Battle Infinity

One of the best crypto DAO projects of the year is Battle Infinity. This project combines Play-to-Earn (P2E) gaming with Web3 technology through metaverse-based games! Users get a decentralized platform within a gaming ecosystem that they can use to play, earn, and create items. Also, they get access to multiple NFT games and P2E rewards!

Lucky Block

Also, there’s the Lucky Block – another leading NFT DAO in the crypto world. this project has a rep for being one of the most exciting cryptos of the year. They offer daily prize draws and jackpots that reach millions of dollars! It works on the Binance Smart Chain (BSC).

God Hates NFTees

Blockchain 3 - ChainWitcher

Finally, the last NFT DAO on our list is the God Hates NFTees organization. It is a community that created a successful NFT campaign out of protests against NFTs. The entire project has one intention: “bring together as many mental degenerates and that the madness”.

So, NFT DAO projects are just starting to launch and pick up the hype. However, the concept of decentralized autonomous organizations has been around for a long time. They’ve been used in all kinds of different scenarios. But, being decentralized, it only makes sense for them to merge with the world of non-fungible tokens!

It checks all the boxes! Supports the growth of existing and new NFT projects. Protects your rights as a creator and holder. And, profits all members of the organization! Furthermore, with the growth of the NFT industry, we are sure to see more DAO action take place!

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