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Shaping The Future Of Web3: An Introduction To Decentralized Autonomous Organizations (DAOs) Although categorizing DAOs can be challenging, and some may overlap, the general consensus highlights the following key types.

By Pierrick Ribes

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In recent years, decentralized autonomous organizations (DAOs) have been making waves in the crypto world. These innovative organizations are built on blockchain technology, using smart contracts to facilitate decision-making, governance, and financial transactions, and are continuing to gain momentum. At its core, a DAO is a decentralized organization that operates autonomously through code, rather than relying on traditional management structures.

There are numerous types of DAOs, each addressing various needs and areas of focus, from protocol DAOs to grant and investment DAOs. Although categorizing them can be challenging, and some may overlap, the general consensus highlights the following key types:

1. Protocol DAOs Protocol DAOs employ tokens as a voting measure to determine modifications in technology protocols. Notable examples are MakerDAO and Uniswap DAO.

MakerDAO is a decentralized credit platform on the Ethereum blockchain that enables users to create and manage the stablecoin DAI. The platform uses smart contracts to maintain the DAI's value and allows users to lock up collateral to generate new DAI, ensuring stability and trust in the ecosystem.

Uniswap DAO is the decentralized governance organization behind the popular decentralized exchange, Uniswap. It enables token holders to participate in decision-making processes concerning protocol upgrades, development, and other important aspects of the platform.

2. Collector DAOs Art collectors join forces in these groups, pooling resources to acquire ownership of NFTs or tangible art. PleasrDAO serves as prime example.

PleasrDAO is an experimental art collector DAO that acquires and manages digital and physical art pieces. It seeks to foster a thriving ecosystem for artists and collectors alike by curating unique and valuable art. The DAO is known for purchasing high-profile NFTs, such as Edward Snowden's NFT, and is committed to supporting artists and promoting digital art culture.

3. Investment DAOs Operating similarly to venture funds, Investment DAOs invest in companies to generate profits and/or influence decision-making. MetaCartel Ventures is a prime example of venture investment collective.

MetaCartel Ventures is an investment DAO that focuses on funding early-stage projects in the Ethereum ecosystem. It operates as a decentralized venture capital fund, pooling resources and expertise from its members to identify and invest in promising projects, with the aim of accelerating the growth of the decentralized technology space.

Related: Navigating The Regulatory Maze: Crypto's Road To Legitimacy

4. Grant DAOs Grant DAOs aim to consolidate and allocate funds to innovative projects that benefit the decentralized community. Aave Protocol, which uses grants to expand its ecosystem, is a fitting example.

Aave Protocol is a decentralized finance (DeFi) platform that enables users to lend and borrow cryptocurrencies. The associated grant DAO focuses on allocating funds to innovative projects that benefit the decentralized community. By providing financial support, Aave Protocol fosters the growth and expansion of its ecosystem.

5. Service DAOs Service DAOs connect skilled individuals globally to collaboratively work on projects, providing specialized services to clients and rewarding contributors with fees and governance tokens. Raid Guild or LexDAO are examples.

Raid Guild is a service DAO that brings together skilled individuals from around the world to collaboratively work on decentralized projects. This collective of developers, designers, and strategists provides specialized services to clients, helping bring their visions to life. Contributors are rewarded with fees and governance tokens, fostering a sense of shared ownership and commitment to the Guild's success.

LexDAO is a service DAO that focuses on the intersection of law and blockchain technology. It comprises legal professionals, developers, and researchers who collaborate on smart contract drafting, dispute resolution, and legal engineering. LexDAO aims to bridge the gap between traditional legal systems and the emerging decentralized landscape, creating innovative solutions that cater to the unique requirements of Web3 projects. By rewarding its members with fees and governance tokens, LexDAO ensures that its community remains engaged and invested in the organization's growth.

6. Media DAOs Independent content creators utilize Media DAOs to bypass advertisers, fostering a more direct relationship and aligning incentives with their audience, such as Global Coin Research.

Global Coin Research is a media DAO that serves as a platform for independent content creators in the cryptocurrency and blockchain space. By bypassing advertisers, it fosters a more direct relationship between creators and their audience, aligning incentives and promoting high-quality content.

7. Social DAOs Social DAOs intend to unite like-minded people in online communities, coordinated around a token fostering digital democracy through social networking and communication such as Friends With Benefits.

Friends With Benefits is a social DAO that unites like-minded people in online communities, coordinated around a token that fosters digital democracy through social networking and communication. It aims to create a supportive environment where members can connect, collaborate, and share resources, leveraging the power of decentralized technology to reshape social interactions.

Although it's difficult to pinpoint the specific types of DAOs that will gain the most traction in the future, projections indicate that protocol DAOs are likely to remain at the forefront, owing to the persistent demand for enhancements in underlying protocols. Social DAOs are on the rise as people increasingly recognize the power of decentralized communities in driving change and fostering innovation. Finally, service DAOs are also expected to gain traction, given the growing demand for specialized skills and services in the blockchain space.

To dive deeper into the future of Web3 and the decentralized web, read our full report on Opportunities in Web3 by clicking here.

This article was originally published on Lucidity Insights, a partner of Entrepreneur Middle East in developing special reports on the Middle East and Africa's tech and entrepreneurial ecosystems.

Related: Transforming Governance For The Digital Era: How Governments Around The World Are Adopting Blockchain And Web3

Pierrick Ribes

Contributing Writer and Researcher, Lucidity Insights

Pierrick Ribes is a Contributing Writer and Researcher for Lucidity Insights. He is interested in disruptive technologies such as Web3, blockchain, digital currencies and retail tech. His career in strategy consultancy coupled with his inquisitive mind make him a thoughtful and investigative storyteller.

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