How to Create a DAO (Decentralized Organization) From Scratch in 2025

Picture an organization that doesn’t have a CEO, that doesn’t have board rooms, and no oversight, yet runs like a well-oiled machine. There are millions of assets traded, and every decision is transparent and public. This is the power of Decentralized Organizations (DAO). 

Creating a DAO from scratch in 2025 is all about building a system where strangers can trust each other and become co-owners, where rules are defined by code, and every transaction can be verified and is transparent. With time, tools to craft a DAO have matured, the pricing has gone down, and the rules have been solidified, making it easier to have one of your own. However, the unique twist you can offer in your DAO is a place for your community with trust, clarity, and cadence.

With 18.4$ billion in treasury value and 21.4$ billion in liquid assets, DAOs are a force that government entities can no longer deny. There are roughly 13,000 DAOs currently with 11.1M+ governance token holders. Some famous DAOs like Noun DAO fund daily goods via public NFT auctions, and Gitcoin governance allocates grants to public goods.

How Does a DAO (Decentralized Organization) Work?

A DAO (Decentralized Autonomous Organization) works on the following principles.

Decentralization: There is no singular or central authority in a DAO. The control and decision-making are shared amongst the users. Anyone with a governance token can participate in decision-making, eliminating the risk of single points of failure.

Smart Contracts: Each DAO on a blockchain has its unique self-executing code that enforces rules automatically once they are agreed upon after voting. These rules are permanent and can’t be reversed once implemented. This allows for transparency as everyone can participate in it.

Token-Based Voting: Every DAO has its unique governance tokens that allow the holders to vote on a proposal. These proposals can include a fork or partnerships. This shows the democratic power of a DAO in action.

Transparent Decisions: Anyone with a governance token can submit a proposal on platforms like Snapshot or Tally. Participants refine these proposals through discussion on forums or Discord. Once the proposal is refined, token holders vote within a set time limit. If the vote succeeds, a new smart contract is formed that is automatically implemented without human intervention.

Different Ways to Build Your DAO

Whether you are a solo founder or a tech-savvy developer with multi-million dollar funding, building a specific DAO varies, and it depends on your scope and technical skill. Some DAOs require deep knowledge of blockchains and smart contracts, while others can be done by simple plug-and-play tools, specifically designed for non-technical users.

Not all DAOs are created equally, as the methods vary a lot. We will help you launch your very own DAO with various methods explained below.

Use No-Code DAO Platforms (Best for Beginners)

If you are new to blockchain and have zero coding knowledge, there are a lot of no-code platforms that offer plug-and-play solutions to create your own DAO.

Aragon: One of the most revered plug-and-play solutions in the crypto space, Aragon allows you to craft your own DAO in minutes with a simple interface. It gives you customized governance settings by allowing you to decide voting rules and permissions.

Your new DAO made with Aragon can be deployed on Ethereum and other similar blockchains and is best for early-stage startups with flexible governance rules.

XDAO: XDAO is another no-code platform that offers user-friendly DAO creations, which can be deployed on multiple chains. It also offers multisig wallets for better security and investment pools for real-world assets via tokens. You can customize your DAO modules for better functionality.

Use Low-Code DAO Builders (For Tech-Savvy Non-Developers)

For people who are tech-savvy but don’t know how to code a DAO, there is a middle ground called low-code DAO builders. This gives you more control over customizations without requiring in-depth knowledge of smart contract programming.

We have a couple of recommendations for low-code DAO builders that can help you launch your own DAO in no time.

Colony: Colony is based on Ethereum, and it offers reputation-based governance, removing the influence of the governance token altogether. You can divide your DAO into subgroups and give them specific tasks. Colony-based DAO allows you to allocate funds and reward contributors.

This DAO works across EVM-compatible chains and has a low maintenance cost on Arbitum. Colony-based DAOs are best for community building and rewarding people for their contributions.

Tally Studio: Tally-based DAOs can be used on multiple protocols like Aave, Uniswap, and Arbitrum. It allows you to launch DAOs with OpenZeppelin governor contracts. You can control and manage voting through Tally’s unique dashboard.

Tally’s DAO allows you to assign a readable username instead of a wallet address. You can also build your governance tools or integrate your tally-based DAO data into your apps seamlessly.

Fork an Existing DAO Protocol (For Advanced Builders)

To fork an existing DAO protocol, you will need extensive programming knowledge. This is not only copying code and adding your smart contracts; forking is about creating a new space for users with new rules and governing ideas. This is not only a technical change, but also a philosophical one.

MolochDAO: If you value your user rights over anything else, use MolochDAO. It offers explicit exit rights via rage quits, protects its members, and manages small to mid-sized groups of users. The DAO forked with MolochDAO grants strong treasury safety with tight rules.

Compound Governor: If you believe in scalable token voting, formal execution via smart contracts, and delegate ecosystems, you can’t go wrong with Compound Governor. It allows its users to timelock executions, conduct checkpointed voting, and do clean parameter governance.

Write Smart Contracts From Scratch (For Solidity Developers)

People with high coding knowledge can use tools like Solidity and OpenZeppelin to create their unique DAOs with their own rules and regulations via smart contracts.

Before starting your journey with creating your very own DAO, you must know NodeJS + Hardhat, OpenZeppelin Contracts via NPM, Solidity Knowledge of 0.8 or higher, and a crypto wallet.

1. Plan access control layer, token layer, core logic layer, governance layer, security layer, and upgradability layer.
2. Plan the access control and assign controls to specific roles or addresses.
3. Create a token layer to manage digital assets.
4. Implement your DAO’s main functionality via the core logic layer.
5. Make a governance layer to enable decentralized control over protocols and upgrades via smart contracts.
6. Create a security layer to protect your smart contracts against hacks and attacks.
7. Create an upgradability layer that allows your DAO to thrive without writing everything from scratch.
8. Deploy your DAO and monitor it. You can also add multiple new features at this point, like NFT royalties and flash loan protection.

Hybrid Approach – Combine Tools Based on Your Needs

With the hybrid approach, you can start simple and scale later. Start with no-code or low-code DAOs, depending on how familiar you are with technology. Deploy your first DAO, and once you become more familiar with the process or gain advanced knowledge, start adding new modules via Solidity.

Use OpenZeppelin contracts for battle-tested base components and make the new upgrades using your own business logic.

Step-by-Step Guide to Creating a DAO in 2025

We have a step-by-step walkthrough that allows you to set up a new governable DAO from scratch with its own unique rules and a community.

Step 1 – Define Your DAO’s Purpose, Type, and Governance Model

The first thing you should do while planning your DAO is to decide its purpose. Is it going to fund public goods? Will it run an art collective? Does it create shared ownership, grants, services, and decision-making?

Once you are satisfied with the purpose of your DAO, the next step is to select its type. You can select from protocols, grants, services, social, investment, or collector DAOs.

The next step is to choose the governance model. It defines who can vote and how. You can choose from token-weighted voting, one member one vote, quadratic voting, or multisig governance.

Step 2 – Choose the Right Blockchain

Selecting the right blockchain for your DAO is crucial as it will decide how your DAO will be built.

Blockchain	Base Layer	Fee	Security	Community	Good For
Ethereum	15-30	High	Excellent	Excellent	Long-term
Arbitum	40,000	Low	Great	Great	Scalable DAOs
Polygon	7,000	Very Low	Good	Great	High-volume DAOs
Solana	3,000	Ultra Low	Bad	Good	Speed-first DAOs

Step 3 – Define Your DAO Framework or Use Already Available Tools

During this step, you decide whether to build your DAO from scratch or go with no-coding or low-coding tools.

If you are a beginner with no prior technology or coding experience, it is better to stick with the hybrid model. It involves starting with no-coding, moving to low-coding, and finally expanding with custom modules in Solidity.

You can also fork your DAO from an already existing one, but it also requires programming knowledge to create your smart contracts. It all depends on how you want to create your DAO and what skills you currently have.

Step 4 – Creation and Launch of Smart Contracts

A smart contract is a self-executing piece of code with its unique rules, process, and logic of your DAO. It is deployed on a blockchain after gaining sufficient user approval. Once deployed, a smart contract can’t be reversed, ensuring the clarity of the process.

Smart contracts are essential for any DAO as they automate governance, voting, and treasury allocation. Most beginner-friendly platforms autogenerate smart contracts, but advanced users can create their own via coding to have better control.

Step 5 – Design a Governance Token and Treasury Setup

Governance token and treasury are two pillars of a DAO community that give power and resources to the users.

The governance token is an asset that gives voting rights to the users. Through voting, smart contracts are deployed, and the treasury is allocated. This makes the governance tokens one of the most important pillars of a DAO community.

There are different rules for token distribution, and decided by the creator(s) of a DAO system. Treasury is a place on the blockchain where the funds are stored. It can be set up by using multisig wallets, streaming payments, and an on-chain treasury with a timelock.

Step 6 – Set Up a Voting and Proposal System

Setting up a great voting system ensures transparency and guides the DAO system’s decision-making process. Once the creators establish a proper voting system, the participants can propose new ideas.

First, you draft the proposal and post it in the community. The community discusses it on forums or Discord. New improvements are made after discussions. Governance token holders then vote on the draft.

For all of these actions to take place, you must have a proper place where your community can engage under proper moderation. Deadlines must be set so that no more changes can be made to a proposal once it is agreed upon.

Step 7 – Build a Community

You can take the following actions to build a healthy community for your DAO.

1. Your objective is clear and well-defined.
2. Make newcomers feel welcomed with a good onboarding process.
3. Spread awareness about our community via social media channels in a professional way.
4. Plan social events that allow people to meet and share ideas.
5. Empower your community members with ownership and governance tokens.
6. Be transparent with everything, even your failures.

Step 8 – Go Live

The foundation is built, and it is time to go live. It is a thrilling time for any DAO creator to finally see the launch, but you must be extra careful at this point.

Before launch, audit your smart contract carefully. They are the backbone of your DAO. Set up a multisig wallet to ensure your treasury is working normally.

Demo your governance token to make sure they are working properly and device a solid plan for the newcomers. They must feel right at home while joining your DAO community.

If you follow these guidelines, you will be able to launch a successful DAO with an amazing community and proper backing to survive and thrive in 2025.

The Easy Way is to Use DAO Creation Platforms

The easiest way for beginners in 2025 to use and create their own DAO is by using DAO creation platforms. They do all teh heavy lifting from creating smart contracts to onboarding members.

You also don’t need advanced coding knowledge to create a DAO by using the creation platforms. They also give you enough freedom to customize your modules in the future. You also get free governance tools by using creation platforms.

The DAO creation on a creation platform usually follows these steps.

1. Choose a platform.
2. Connect your wallet to the platform.
3. Define your DAO’s name and mission.
4. Set governance parameters and voting systems.
5. Create smart contracts and deploy them.
6. Use a multisig wallet to create a treasury.
7. Invite your members through social media or other channels.

Best Platforms for Building DAOs

You can use the following 7 best DAO creation platforms to create your own DAO in minutes.

1. Aragon (modular governance and multi-chain support).
2. DAOstack (scalable framework with GEN tokens).
3. Colony (reputation-based governance).
4. DAOhaus (no-code DAO generation with Moloch style).
5. Gnosis Safe (multisig wallets and treasury management).
6. MolochDAO (lightweight, ragequit enabled).
7. Tally (on-chain governance dashboard with analytics).

Legal and Regulatory Considerations for DAOs

DAOs, while revolutionizing the communities, still operate in a legal gray area. This can create uncertainty among the members and the contributors.

DAOs around the world still face the following legal gray areas.

1. No physical headquarters or centralized ownership.
2. No government rules, and the only rules followed are smart contracts made by communities.
3. Most of the community is anonymous.

Due to these factors, most countries don’t recognize the legal status of DAOs. There are no security laws, defined taxes, or AML compliance for DAOs, making them undesirable to government entities. Many banks don’t allow DAOs to open bank accounts due to government policies.

To counter these problems, some jurisdictions have introduced legal wrappers to cover DAOs. This allows the formation of LLCs, which gives DAO participants legal status, the ability to own assets, and sign contracts.

Jurisdiction	Wrapper Type	Features
ADGM (Abu Dhabi)	DAO Foundation	Tailored for blockchain entities
Marshall Islands	LLC (non-profit)	Token holders can become members without KYC
RAK DAO (UAE)	DAO Association	Fiat access
Switzerland	Association or Foundation	No shareholders
Wyoming (USA)	LLC	DAOs are recognized as LLCs with limited liability

Ensuring DAO Security: Risks and Best Practices

Some of the major security risks DAOs face due to their open nature are.

1. Smart Contracts: As smart contracts are code written by humans, they are vulnerable to attacks by hackers and other malicious entities.
2. Treasury Management: If your treasury is not properly maintained or lacks multisig wallets, it can result in loss of funds.
3. Hostile Governments: Governments can attack DAOs with flash loans and can participate in hostile takeovers via the members.
4. Insider Risk: People with authority or having more governance tokens can exploit a DAO system for their gain.

You can employ the following best practices to save your DAO from potential disaster.

1. Code Audit: Use third parties to audit your smart contracts before deploying. These can include paid antivirus software or professionals.
2. Multisig Wallets: Use multisig wallets to prevent your treasury funds from being stolen.
3. Timeclocks: Allow your community to review proposals by delaying deployment of smart contracts.
4. Role Management: Properly define and restrict access controls to sensitive information.
5. Monitoring: Use real-time alerts for proposals, deployments, treasury changes, and contract interactions.
6. Bug Bounty: Give bug bounties to weed out any vulnerabilities in your smart contracts.

You can achieve maximum DAO security by starting simple and using creation platforms. Make sure to document every little thing and educate your community about their roles in the formation of smart contracts. Hire proper auditors who work non-stop to check any discrepancies in your DAO system.

Some Popular Real-World DAOs for Inspiration

Below is a list of some popular DAOs that have excelled over the past years and have brought DAO to the mainstream.

1. Uniswap DAO: Uniswap DAO is a protocol DAO whose sole mission is to govern the Uniswap decentralized exchange. They use token-based governance with UNI and have transparent treasury management. They have an active proposal system for upgrades and have shown the world how a DAO can successfully manage a billion-dollar DeFi.
2. MakerDAO: MakerDAO is another protocol DAO whose mission is to govern the DAI stablecoin ecosystem. They have also done real-world asset management alongside strong documentation and community forums. They have demonstrated how DAOs can manage real-world financial systems successfully.
3. Friends with Benefits: FWB is a social DAO built to promote art, music, and web3. They give token-gated access to events and have created a strong community in the process. It is a mixture of online and real-world activities. FWB has successfully shown the world how a DAO can create value-driven communities.
4. MetaCartel Ventures: MetaCartel Ventures is an investment DAO to fund early web3 projects. They have Moloch-style ragequit for users and a tight-knit contributor base. They have successfully shown how a lean, decentralized capital venture can work.

How Decentralized Organizations are Expected to Evolve Going Forward

Below is a list of trends that are going to shape DAOs in the coming days.

1. Modular DAO: In the coming days, DAOs will become more modular, with plug-and-play modules used by highly sophisticated creation platforms. This will allow DAOs to customize voting, treasury, and membership systems without rewriting everything.
2. AI-assisted Governance: AI will play a major role in DAO governance with proposal management, detection of malicious code, and optimized decision-making. With improved AI, it can filter out useless proposals and even improve decision-making, thus streamlining a DAO efficiently.
3. Multichain Voting: With advancements in blockchains, it will become possible for people from other chains to participate in decision-making. This will include variety and increase the value of a current DAO system.
4. DAO2DAO Cooperation: DAOs will start cooperating by sharing resources and information. This will create a network that resembles a federated network. MetaCartel funds ventures in association with other DAOs.

Learn More About DAOs and DeFi With Dypto Crypto

Creating a DAO and deploying it can be complex for newcomers. However, it shouldn’t be if you sign up for Dypto-Crypto to learn more about DeFi and how Decentralized Organizations work with our free How-To guides.

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Frequently Asked Questions (FAQs)

Q: What does DAO stand for?

A: Decentralized Autonomous Organizations that work independently from governments or financial institutions.

Q: Do I need to code to create a DAO?

A: No. You can use no-code creation tools like Aragon to create your DAO in minutes with fully working smart contracts and treasury.

Q: How much does it cost to launch a DAO?

A: It depends on your needs, goals, and tools used to launch a DAO. The cost can range from $50 to $500 for beginners and can go up to $50,000 for advanced users.

Q: Can I make money from a DAO?

A: Absolutely, but it depends on your position and role as a contributor. Governance tokens increase in value over time and can net you massive profits if used wisely. You can also get paid for your contributions, like coding smart contracts or finding bugs in security.

Q: Which platform is best to create a DAO in 2025?

A: It depends on your needs and technical expertise level. For beginners, Aragon is the perfect fit. You can also use Colony and Snapshot as alternatives.

Q: Is it legal to start a DAO?

A: Yes, but with caveats. The legality of a DAO depends on the region it is started. Many countries in Asia still don’t recognize DAO as legal, thus creating a barrier for the creators.