Thanks to the creation of blockchain technology in 2008, a lot of developments have occurred since. For example, the creation of decentralized applications, cryptocurrencies, metaverses, NFTs and decentralized finances (DeFi).
However, these are just the tip of the iceberg, as there are other developments that are slowly becoming mainstream. One of those are Decentralized Autonomous Organizations or DAOs, which were introduced for the first time in Ethereum's Whitepaper by Vitalik Buterin.
DAOs are a new type of organization that are developed for their community, allowing them it to make decisions about the future via voting and using governance systems.
At Rootstrap, we knew is was just a matter of time before organizations started developing their own DAOs which led to the creation of DAOFY - the first NFT incubator project powered by a company.
What is a DAO?
To understand DAOFY as project, it's important to know how DAOs work. Decentralized Autonomous Organizations are a new type of online-based organization whose rules are established on smart contracts in speed up and make processes more efficient.
They are collectively owned and managed by its members avoiding the principal agent problem, while at the same time making the organization more horizontal and less vertical. All decision inside a DAO are made via proposals, and all of the DAO members can vote in favor or against said them. By operating this way, all members have a voice.
To make a DAO come to life you need 3 things:
- A community
- A governance system
- A token
The first thing a DAO needs, is its own community. At first, this community can be very small made up of just founders. But, it's important that the team is committed to the project as creating a DAO is very similar to building a startup.
With all size communities, we need to create governance rules to be established on smart contracts, so they are autonomous and provide voting system for proposals. We can develop our own governance system, but this can be complicated, hence why we can instead use a governance system that large DAOs are already using.
Examples of DAO governance systems
- Lazy Consensus → Colony.
- Conviction voting → 1Hive.
- Permissioned relative majority → LexDAO.
- Holographic Consensus → DxDAO.
- Token based quorum → Curve or Compound.
Finally, we need to develop a token economy or tokenomics based in our community and on our governance system. To create robust tokenomics, we first need to evaluate our project in the market to avoid potential pivots.
When we start to see our idea being validated in the market, we can then begin developing tokenomics based on strong fundamentals, our community, and forecasts on growth based of our governance system/voting methodology.
How DAOFY began
In early 2022, a group of Rootstrap developers had an idea - “how about we create a DAO?”... Well, we all loved that idea, but we didn't know where to start.
Of course, we did a lot of research online but the information available was not of any value. And, it was at that time that we began our DAO journey, treating it as if we were creating our own start up.
Together, we developed the following idea → The first NFT incubator DAO incubator.
With our idea, we started to develop our mission, vision, and key values. Once we had clearly defined concepts, we searched for help on creating a DAO, which led us to Aragon (a giant DAO which helps creates DAOs).
We met with members of the Aragon team and we learnt about their open-source services. They also educated us on governance systems and tokenomics.
After a successful meeting, we came away with the following knowledge on the different phases of a DAO lifecycle:
In the above chart ,we see the 4 phases a DAO will have in its life, going from being centralized to decentralized once the business idea is validated in the market. This is the process we will follow to make our business idea (DAOFY) successful.
OK, so what is DAOFY?
DAOFY is the first NFT incubator DAO on the market powered by a high-profile company, i.e. Rootstrap.
The aim of DAOFY is to help NFT Authors (people that have a good idea that can be solved via NFTs), to develop that idea, help them with NFT Makers (developers, marketers, & artists), to become successful in the market. DAOFY does this in exchange for a percentage of the royalties or project.
With DAOFY, we are developing a new type of incubator. At first, we will not be helping NFT Authors with money, instead, we will help them develop their technology via our developers. We will also help them develop successful strategies, and efficient communication via marketers, while also providing them with high quality artists to create the all important NFTs.
Every trimester, we will open up a submission period for project application in which we will view ideas for development. During this period, NFT Authors can submit their ideas for consideration. This can all be done online.
The DAOFY team will review the ideas and evaluate those that have potential to succeed in the market. We are not just going to help NFT Authors create any project, we have developed standards to help determine if a project has market potential or not.
Those standards are as follows:
- NFTs with real world utilities.
- NFT Authors must have experience in the industry they want to impact.
- Project should be profitable and NFT Authors should have an idea on how to achieve this.
- The idea should be presented via documents or a white paper. Analytics and data will help.
We will follow these standards to select the ideas that are aligned with our goals, and the DAOFY team will vote on their favorite projects. The projects with the most community votes will be chosen.
It is important to clarify that DAOFY will only develop as many projects as its resources allow.
At DAOFY, we strongly believe that NFTs are here for the long haul. We believe NFT have not yet reached their full potential. This is why we want to develop projects that can reach this potential via traceability, ownership, or connecting cross-reality items.
What phase is DAOFY currently in?
At the time of writing, we are in phase 1 of a DAO lifecycle, as highlighted in the DAO lifecycle chart previously.
We have developed the first version of our light paper containing a simple governance system and some NFT based tokenomics in its early stage.
We are also going to use Snapshot to produce off-chain voting, as we are validating our idea in the real market, and we don't want to develop a token at this stage.
At the same time, we have began validating our idea via a beta testers project aligned with our standards. We are going to develop this project using some of Rootstrap’s resources, and some of our first external community members.
Next up for DAOFY
As touched on, DAOFY is the first NFT incubator DAO powered by a world class company like Rootstrap. The aim of this project is to help NFT entrepreneurs bring their unique ideas to reality via our NFT Makers.
The DAOFY project is just beginning but we are rapidly going from strength to strength. We are confident that in just a short period of time, we will be helping to successfully bring multiple projects with real potential to the marketplace.
Hence why we would like to effectively grow our community with talented hardworking people willing to join the organizations of the future, aka DAOs.
Would you like to be part of our DAOFY NFT Makers team? Let us know in the comments section!