DAOs have been transforming lives and revolutionizing technology with unique experiences and interactive communities over the past few years. They are no longer limited to DeFi or NFTs; they are now managing multi-billion-dollar industries and funding projects that can help people in the long run, making it important to learn how they operate and create unique experiences not offered anywhere else.
DAOs are now at the core of decentralized financial institutions and even going beyond that to help emerging artists or people stuck in warring countries. Their impact is seismic, and any government or corporation can no longer deny their presence. Let’s explore how DAOs are shaping Web3 with some real-life examples.
What is a DAO? A Quick Refresher
DAO, or Decentralized Autonomous Organization, is an entity that is entirely governed by code in the form of smart contracts. No one person or corporation holds any authority over a DAO; instead, the token holders or participants hold all the power.
For an organization to qualify as a DAO, it must have the following characteristics.
Decentralized: Decisions must be made by the community, and no single entity can control it.
Smart Contracts: Rules are implemented automatically with the help of smart contracts once they are approved by voting. The community also proposes Smart Contracts.
Member-Driven: Token holders or members have full control over the functionality of a DAO.
Why DAOs Matter in the Web3 Era?
As Web3’s core function is decentralization, DAOs shift power from companies and organizations to token holders or communities, making them an important cornerstone of Web3. In non-DAO organizations, decisions are made and controlled by power-hungry men, leaving zero room for community input. DAOs turn this around and shift the power back to the users.
DAOs’ operations are transparent as the decisions are made, approved, and implemented by the community in the form of smart contracts. Unlike traditional organizations, token holders or the community vote on important matters.
DAO allows users to maintain control over their assets. This is the heart of Web3, its original philosophy. DAOs are not only important for the Web3 era, but they are the ones that truly embody what it stands for.
Financial DAO Use Case and Examples
In the world of finance, DAOs are changing the rules for capital allocation and how treasuries are maintained.
DeFi systems pool funds from members and allow them to vote to decide on how these funds will be used. All these decisions are made by on-chain voting by members or token holders.
Unlike traditional finance, a DAO allows its members to vote on how lending, borrowing, and investing yield. Every transaction in the treasury of a financial DAO is transparent and available for users to audit. Let us discuss some protocols for the financial DAO and see some of their successful real-life examples.
DeFi Protocol Governance
In the DeFi system, DAOs control the protocol governance, from lending platforms to Automated Market Makers (AMMs). Users with governance token control these decisions instead of a central authority.
All protocol upgrades are decided by the community, just like the distribution of fees. DAOs in DeFi systems also control risk management and liquidity incentives.
Real World Examples
MakerDAO: MakerDAO governs the DAI Stablecoin, which is backed by crypto collateral and pegged to US dollars.
MakerDAO now works with multi-collateral DAI, accepting assets like USDC, WBTC, or even real-world assets like an estate.
They charge interest on borrowed DAI to control supply and offer yield. MakerDAO automatically sells collateral if the value falls below the threshold.
MakerDAO has helped the real estate world immensely by providing loans for home flipping. They also help finance SaaS companies and supply chain loans in Asia.
Aave DAO: Aave is a decentralized liquidity protocol that allows users to lend or borrow their assets for interest.
Aave allows its token holders to vote on which assets can be supplied or borrowed, and they can also choose between different interest rates. Aave has insurance against protocol failures.
Aave works across multiple chains and has launched its decentralized stablecoin, governed by the DAO.
Investment and Fundraising
Investment DAOs allow their users to pool their crypto assets in a shared treasury. These funds are then used to finance startups, early-stage crypto projects, and other financial ventures.
Contributors on the chain get governance tokens that allow them to vote on how the investments will be made. This executes smart tokens, which dictate how funds will be invested and how returns will be handled.
These DAOs support NFTs, DeFi, and Web3 startups, without the need for conventional financial institutions.
Real World Examples
The LAO: The LAO is a venture capital (VAC) that is legally compliant and member-directed. The LAO combines smart contracts with legal financial structures and has funded over 130 DeFi and Web3 ventures since its inception in 2020.
MetaCartel Ventures: MetaCartel Ventures is a profit-based venture DAO that has invested over 6$ million in Web3 apps and dApps. Its members are called Mages, who control everything through smart contracts.
Treasury Management and Budget Allocation
Treasury management is one of the most important functions to keep any DAO working smoothly. It involves decision-making via smart contracts to decide how the budget will be used in certain ventures.
Once the decisions are made via on-chain voting, funds are used for either grants, salaries, bounties, partnerships, or protocol upgrades.
Real World Examples
Nouns DAO: Nouns DAO funds artistic ideas and even esports via selling one of its NFTs every 24 hours. It operates in Wyoming legally via DUNA.
ENS DAO: The primary function of ENS DAO is to create jobs for developers and fund multiple groups with a focus on public goods. To date, ENS DAO has spent over 900,000$ and 250 ETH to support developers.
Grant Distribution and Ecosystem Growth
DAOs, over the years, have been helping creators, developers, and artists via vote-based grants. Many local initiatives have been helped with grants from DAO systems, which allow variable interest rates and even interest-free grants for newcomers with unique ideas.
This makes the whole premise of decentralization extremely important to people, as they no longer have to rely on government-led financial institutions and their strict rules.
Real World Examples
Gitcoin DAO: Gitcoin DAO has distributed over $50 million in grants to Web3 apps and dApps, supporting over 4,000 projects, including Uniswap.
They are pioneers of quadratic funding, which helps community-based projects by matching the number of contributors, not the amount.
Aave Grants DAO: AGD has supported DeFi simulators, risk parameter editors, mobile apps, educational tools, and GHO integrations for payments.
Non-Financial DAO Use Cases and Examples
The greatest work by DAOs is how they redefine the digital identity with a user-owned system. They also play an important part in empowering upcoming artists without the need for centralized institutions.
DAOs have closed the gap between contributors all over teh world by removing the restrictive layer known as government rules. This has allowed for infinite growth in fields like Decentralized Science, where research is now funded by DAOs, instead of relying on government grants.
Work & Contribution Coordination
The DAO system has allowed for fair peer reviews from the community, and contributors are rewarded for their efforts. Contributors gain influence with their data stored on chains, and it increases their earning potential.
This process replaces hierarchy with actual work contribution, allowing talented people to flourish.
Real World Examples
DAOhaus: DAOhaus helps other smaller DAOs with rapid decision-making and project execution. It has introduced “Boost” modular apps that give users onboarding tools, treasury management, and signal voting.
Coordinape: Coordinape is a peer-to-peer compensation tool used by DAOs to fairly compensate the contributors depending on their contributions. Multiple DAOs like AladdinDAO have used it to reward their members for marketing and education.
Gaming and Metaverse Governance
DAOs allow players and creators to own real land, assets, and economic incentives in digital worlds. It is achieved by using smart contracts and treasuries inside the games and metaverse.
Games created with DAOs are no longer corporation entities; instead, they are managed and owned by communities contributing to them.
Real World Examples
DecentralandDAO: DecentralandDAO owns the biggest virtual world where players can own lands, create their own experiences, and even take part in decision-making via tokens.
Yield Guild Games: YGG owns and rents in-game items like lands and characters to its members, known as guild members. They have regional guilds that work independently from the parent YGG. It allows players to earn tokens by participating in events and various games.
Collective Ownership and Cultural Curatio
DAOs have changed how people see ownership. Contributors can now co-own assets in the digital world, like NFTs. You can also co-own music albums via tokens. This has led to DAOs enabling and helping emerging artists to auction their digital assets via tokens.
Real World Examples
PleasrDAO: PleasrDAO is led by DeFi leaders and digital artists who co-own a lot of valuable NFTs, like the Doge meme NFT, which costs $5.5 million. They allow their contributors to own a part of NFTs for as low as $1.
Red DAO: Red DAO is the pioneer of digital fashion and wearables. They own the Doge Crown NFT by Dolce and Gabbana, which costs around $1.25 million.
Social Impact and Philanthropy Purposes
DAOs are playing a major role in organizing social fundings and helping people affected by man-made or natural disasters. As these fundings and events are transparent and fast, it has allowed them to help people with over $100 million.
These DAOs are also known as Impact DAOs, and their communities are readily available to help people in need. Decisions are made by voting and are acted upon immediately with smart contracts.
Real World Examples
UkraineDAO: Founded in 2022, UkraineDAO helps fund Come Back Alive NGO to help people in Ukraine. $7 million was raised within a few hours with the help of the community, and funds are used transparently for humanitarian efforts.
KlimaDAO: KlimaDAO has become a hub for climate coordination by offering tools like Klima data.
Identity and Reputation Governance
A lot of DAOs are currently working towards adopting systems that can verify members, assign them voting rights, and create on-chain identity layers to recognize contributions.
It is done to prevent vote manipulation by bots and represent fair governance by participants, not only token holders.
Real World Examples
Proof of Humanity: PoH is a cybil-resistant registry that believes in one-person-one-vote in DAOs. Every contributor is verified on-chain, which allows fair UBI distribution.
BirthID: BirthID allows identity verification of contributors without revealing their personal information. This allows users to interact in a trusted network, and it also ensures sybil-resistant voting.
Scientific Research and DeSci Coordination
DAOs are helping fund scientific research and DeSci projects, which previously relied on government grants. This helps researchers and scientists by removing funding bottlenecks, opaque peer reviews, and restricted data access. This also minimizes the monopolies of corporations and governments over scientific institutes.
This has helped the Biotech industry, which is often forgotten due to its high-risk, high-investment structure. Researchers can now share their findings with transparent peer reviews.
Real World Examples
VitaDAO: VitaDAO is a community-funded DAO focused on funding research to increase humans’ lifespan and quality of life. They have helped Matrix Bio, which explores anti-cancer and pro-longevity molecules.
TalentDAO: TalentDAO has helped Gitcoin improve its contributor engagement with specialized surveys. They also offer consulting and tools for DAOs to measure the performance of contributors and enhance governance.
Wrapping Things Up
DAOs are the connecting tissue of Web3. From NFT communities to gaming guilds and social impact collectives, DAOs are evolving the landscape and making things better in 2025 by giving all the control back to the rightful owners, the people.
They allow global cooperations, fund scientific projects, and help emerging artists with a transparent, on-chain system that contributors govern.
While DAOs seem like a confusing subject to master for newcomers to Web3, you can ease your worries by joining Dypto-Crypto for free. We offer free guides, tutorials, and best-in-industry courses.
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Frequently Asked Questions (FAQs)
Q: What are the top DAO examples in crypto today?
A: MakerDAO, Uniswap DAO, Aave DAO, Arbitum DAO, Aragon, and PleasrDAO are prime examples of successful DAOs in today’s world.
Q: How do DAOs make decisions?
A: With the help of a transparent, governance-based voting process. It is usually done with the help of governance tokens; however, the rules for tokens vary for each DAO.
Q: Can anyone create a DAO?
A: Yes. We have a detailed guide on how you can create your DAO from scratch in 2025 with or without any coding knowledge.
Q: What are the risks of joining a DAO?
A: Risks of joining a DAO can range from security vulnerabilities to inefficient governance. DAOs also face challenges from governments, and upon scaling, coordination can become difficult with more members from across the globe.
Q: Are DAOs legally recognized?
A: Sort of. Their legal status depends on geopolitical locations. Most first-world countries are allowing DAOs to operate with limited liability, while they are still taboo in most of Asia and countries where governments rule supreme.
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