DAO Fundamentals Part 2: How to create a basic DAO

Most of the templated DAO creation platforms work the same way.  Technically, DAOs are not difficult to set up, even when building from scratch. A good way to start understanding the structure is to look at one of the most basic templates, Aragon. 

The  set-up process can take as little as 30 minutes once the concept  is fully formulated. Walking through this process on a test net helps DAO creators think through all the issues involved. 

Here are the steps so you realize how easy it is. Just make sure your organization is thought-through by working through the rest of the modules. 

1. Buy Matic on a meta mask wallet.
2. Go to the Aragon Client page.  
3. Connect your meta mask wallet. 
4. Click create an organization. 
5. There are many different templates, but you would most likely want to use Create company as it gives transferrable tokens as opposed to non – transferrable ones. This will mean you will be able to gift or sell the tokens. 
6. Use this template then input the name that you want to use as the organization/Dao name.
7. You can then choose the minimum support percentage to hold a vote and the minimum supply to pass a vote.
8. Set the duration allowed for a vote.
9. Choose a token name and symbol, this cannot change. 
10. Then choose a token holder, so you can add more later.
11. Then launch the organization. 

Note the critical issues here:

• What percentage is required to hold a vote.  Too little and there may be too many proposals that no one really cares about, or a bad actor. Too high a percentage and a vote may not be able to get off the ground.
• Founding teams often want to ultimately control the vote, at least for a period of tiem. So, for example, if there are 1000 tokens and the admin holds 51%, they can still hold votes but are in control of what passes and what doesn’t. In this case, the vote is really more like a poll. DAO creators often disclose what percentage of the tokens the founding team holds in the white paper to be transparent about where the actual control lies. The culture around DAOs means that some users value more decentralized governance.
• Tokens can be used to incentivize contributions and/or be sold on the open market. So founders will need to determine who will be awarded tokens, how many will be released for sale, how many kept in the treasury, and if there will be multiple release dates.

* Here’s a live demo of how it works step by step on Aragon;

Next: Advantages and disadvantages of forming a DAO.