At the core, a DAO development platform consists of four key elements – Governance, Objective, Voting, and Rewards. While we have already covered how the platform works, understanding it to a level where you are involved in creating a DAO would need a detailed step-by-step understanding.

1. How to create a DAO on
blockchain?
Every entrepreneur wants to reach a stage where they form a big business that is
equal parts scalable. While ambitious, they end up facing a challenge – one that is
shared by every growing business – establishing an effective, democratic
governance. After a point in business growth, they face internal governance
tensions where the more the participants the more difficult it gets to get to a
consensus.
Blockchain technology has found a solution to this problem through DAOs –
decentralized autonomous organizations. It is a DeFi project that makes use of
distributed ledger technology and smart contracts for executing governance
decisions based on voting outcomes. Here’s a high-level view of how DAO
platforms work.
Table of contents
Traditional organizations vs DAOs
How to build a DAO?
Establish the purpose
Plan ownership and voting
mechanisms
Build the governance structure
Set up incentives or rewards
Token creation and allocation
Technology stacks for building
and launching a DAO
What would be the cost of a DAO
project?
FAQs
A project gets launched having a defined purpose and specialty.
The users join the project by buying native coins and getting voting rights in
return.
The community members vote on business decisions with every member
having the necessary number of tokens getting the voting right.
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2. Now with something so inherently complex to build and revolutionary, what does
a decentralized autonomous organization have to offer that would make it
eventually replace the age-old hierarchical format of making decisions?
Traditional organizations vs DAOs
DAOs and traditional organizations are completely different in concept and
working. While the former deals with complete decentralization and an emotion-
less mode of operation, the latter is more dependent on what individuals’ position
in the business.
Category Traditional Orgs. DAOs
Organizational
structure
Hierarchical Flat, Democratic
Role of voting
Any party can implement changes based on the
company’s structure
Mandatory for making any changes
to the protocol
Governance
Based on board of directors, executives, or
active investors
Based on community
Transparency Private and restriction on public involvement Transparent and fully public
Services handling Requires human handling Automated
As you would have gathered by now, DAOs and traditional organizations work with
the same end goal – to make decisions easier and free from bias. The only catch
is that DAOs make it all easier. With this, it is time to look into the how.
How to build a DAO?
At the core, a DAO development platform consists of four key elements –
Governance, Objective, Voting, and Rewards. While we have already covered how
the platform works, understanding it to a level where you are involved in creating
a DAO would need a detailed step-by-step understanding.

3. Establish the purpose
The primary stage of answering how to create DAO is identifying why it is
necessary, the role it would play, and how it would work. While the discovery
workshop session will answer all these questions, on the technical side you will
need to plan out a foundation having –
Plan ownership and voting mechanisms
Once you know the goals to set up when you build a DAO, next comes
establishing the ownership and planning out the voting mechanisms. When it
comes to transferring ownership, you will typically get three options –
Now as for the voting mechanisms, a popular way is to decide the votes based on
the number of tokens. The side that has maximum tokens will get to call the final
shot.
Build the governance structure
This phase of when you create a DAO deals with detailing the decisions that will
be made after the DAO has been set up. It will also have information on
processes’ use cases, voting mechanisms, and clarity on the DAO’s essential
components, such as –
Encrypted wallet allowing for token storage and transactions
Smart contracts powering automated processes
Community of key members
Specific voting timeline
Forum or chat room option for members
Airdrops – Tokens are given based on contributions to the community
Rewards – Payments made to members who achieve their duties
Token purchase – List tokens on decentralized exchanges
The exchange that will hold the transactions

4. Set up incentives or rewards
The last stage of building DAO in blockchain is setting up a rewards system for
the DAO members to pay in turn for their contributions. Usually, the governance
tokens are distributed to the contributors who use the DeFi protocol and
represent the ownership rights that they carry. The members can also be
rewarded through cryptocurrencies, grades, titles, or a combination of them.
Token creation and allocation
Once every goal, governance rule, and incentive system is in place, concentrate
on how the DAO tokens would work. Noting how the tokens would decide the
voting rights, you should have tokenomics in place which would clearly explain
the token’s purpose, their allocation, how they would affect supply, etc.
Now that we have looked at what is DAO and what are the different steps you
would need to take to answer how to create DAO, let us get down to the one
question that we are sure you must be asking – what would be the cost to start a
DAO?
Let’s answer that in a bit after looking into the technology stacks that would help
you build the DAO and then launch it in the market.
Technology stacks for building and launching a
DAO
Frameworks Colony, OPENLAW, DAOstack, and Syndicate
Contribution and reputation GITCOIN, SourceCred
Frontend & analytics Tally and DeepDAO
Developers who will work on the code
Validator who will verify the transactions
Users who will participate in the community
How will the DAO make money – the sale of native tokens or investors’
shares in return for their investments in an early-stage project

5. Treasury management Parcel, Multi safe , Gnosis Safe
Compensation OPOLIS, Sablier, Superfluid
Governance and voting Snapshot, Paladin, Tally
Access MintGate, Unlock, Collab.Land
Discussion Discord, Telegram, Twitter
Identity IDX, ENS
Databases The Graph, CouchDB
Programming language Solidity, Vyper, Rust, Python, C++
Smart contracts Truffle, OpenZeppline, HardHat, Infura, Alchemy
Wallets Binance, Trust Wallet, Meta Mask, Coinbase
Launch platforms DAOhaus, Collab.Land, Aragon
These technology sets when added with the type of DAO you wish to create and
its specific features would ultimately decide the cost of your DAO blockchain
development solutions. As we conclude the article, let us give you a peek into
what to expect when it comes to deciding the cost range you wish to spend on
the project.
What would be the cost of a DAO project?
The cost of DAO project, as we discussed above, would primarily depend on a mix
of – type and its features, technology stack, and the blockchain platform you
choose.
Additionally, here are some costs you will have to keep a note of.
The DAO setup cost on Aragon and DAOstack Alchemy is 2ETH.
Registering DAO as LLC would cost somewhere around $100.
You’ll need to hire a blockchain app development services company to
create an internal token (ERC-20) and generate its supply, voting system
with consistent smart contract logic and a safe functioning.
DAO smart contract audit
The DAO should also have a platform for member communication and
essential news updates.

6. With this, we have looked into every aspect of DAOs – the information you would
need to initiate your project with confidence.
This is the stage where you partner with a blockchain development agency that
doesn’t just understand your project’s concept but also has an experience in
converting complex blockchain projects into solutions that have a mass usage.
Enter Simublade.
At Simublade, we have a dedicated blockchain R&D division that runs hypothesis
tests on different decentralization-focused use cases including DAO. We are
prepared to work on your project with the right tech expertise and team. Share
your idea with us today.
FAQs
How does DAOs work?
A Decentralized Autonomous Organization (DAO) operates on the principles of
blockchain technology, embodying decentralized decision-making and
governance.
In a blockchain DAO, smart contracts facilitate the organization’s functions. The
participants hold tokens that represent their voting power, enabling them to
propose and vote on decisions, such as changes to the protocol or allocation of
funds. These proposals are executed automatically through smart contracts if
they meet the predefined criteria.
How can DAOs be used?
Decentralized Autonomous Organizations offer a versatile framework for
collaborative decision-making and resource management. They can be employed
across various industries and applications, ranging from governance and finance
to art and gaming.
In governance, they enable communities to collectively steer the direction
of projects or protocols, fostering a democratic approach to decision-
making.
In the financial sector, DAOs provide a transparent and decentralized way to
manage funds, enabling trustless transactions and reducing reliance on
traditional intermediaries.
Additionally, DAOs can revolutionize the creative industries by allowing
artists to collaboratively govern digital assets and distribute rewards based

7. What are some common types of DAOs?
Some common types of DAOs include –
How much does it cost to build a DAO project?
There is no fixed way to answer this question. The cost to form and then launch a
DAO would depend entirely on the type of DAO project you choose and its specific
feature sets, the technology stack it will be built on, and the blockchain platforms
you will be using.
on community input.
Governance DAO: MakerDAO
Funding DAO: The DAO (though it faced issues and resulted in a fork leading
to Ethereum and Ethereum Classic)
Collective Ownership DAO: ConstitutionDAO
Decentralized Venture Capital DAO: MetaCartel Ventures
Decentralized Autonomous Exchange (DEX DAO): Uniswap Governance
Decentralized Autonomous Nonprofit: Gitcoin Grants DAO
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