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In the wild decentralized space of great noise, distractions, and serious risks, a frequently overlooked yet novel and important web3 niche is growing its wings — DAO governance tools.
Several months ago we published a feature piece on a small startup called Coordinape that's building HR and payroll tools for DAOs to efficiently compensate their members for valued contributions no matter the task at hand. Coordinape is being used by DAOs like Bankless, Pool Together, Gitcoin, Nouns, DAOhaus, and over 150 others.
Since we first discovered Coordinape, the sector of DAO tooling had become a trend as we continued going through hundreds of early-stage web3 startups every week. Many of such companies are solely focused on the data and analytics aspect for DAOs so that core teams would have insight into their operations from a bird's eye view.
Others are building onboarding solutions for more simplistic access to decentralized organizations, community engagement tools, incentive mechanisms, bots for social platforms to assist members in achieving their goals, and more. In this post, we try to gain and share a better understanding of this emerging trend and note where the innovation comes from.
First, we want to highlight a phenomenon that's been appearing over and over again in our data. The original Nouns DAO and its community have inspired not just real-world movements and street art, but also a number of derivative works and governance tools specifically designed for the Nouns ecosystem, including:
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And a series of others. Nouns has been widely regarded as a project with a valid roadmap, endorsed and integrated by serious software projects like Brave, so it is natural to see positive views coming from both the rather picky web3 community, and, partly, the mainstream.
Moving on, there has been a plethora of platforms that help manage existing DAOs, launch new ones, and effectively onboard new people with the help of well-designed memberships. Many such projects offer all or several of the features above, which makes them all-inclusive. For example:
DAO management is unique because of the on-chain verifiability - of wallets, member activity, and proposal statuses, which makes every process and idea transparent and difficult to infuse with false data. Unless it's smart contract bugs or a vulnerability, of course.
When "code is law", especially in DAOs, the law can be broken when someone “breaks” the code, and it has been proven again and again. Just days ago we covered the recent Curve hack in real-time – a hack that had mass implications across ecosystems.
Proposal generation and voting across different blockchains and their ecosystems is one of the most crucial aspects a new DAO would need to figure out. After realizing it, developers soon started building independent shovels and axes for solving this in a way that enabled people to connect their wallets and instantly access a large collection of DAOs to be part of.
Taking everything into account, we can say that the space of DAO tooling is rapidly evolving and attracting more and more capable developers who assist in building decentralized, independent systems that offer users access to multiple on-chain “governments” in an instant.
It surely feels better to know that once you enter a new DAO and start participating, your compensation will arrive, your contributions will be acknowledged and provided XP points, and some viable structure will be there to assist you.