> For the complete documentation index, see [llms.txt](https://rhys-nemo.gitbook.io/tokenomics-bible/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://rhys-nemo.gitbook.io/tokenomics-bible/fundamentals/dao-and-governance.md).

# DAO & Governance

Providing rules, directions, boundaries & order in the Crypto ecosystem

**DAO** - Decentralised Autonomous Organisation. Member-owned communities without centralised leadership. Collectively owned and managed by all members of the organisation with no central leadership. DAOs are run and governed by the rules set in a smart contract.

![Stolen from Youtube](https://3505330573-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F17Y4ZB0dl280NH9CAMkR%2Fuploads%2Fj1nLhOK1tQI5I7fXX1sh%2Fmaxresdefault.jpeg?alt=media\&token=805cacbf-0e04-428e-a497-077882edf104)

### What IS a DAO?

Key terms:

* **Governance token** - SPL-Token that allows token holders to vote and submit proposals to a DAO. These SPL-Tokens are treated as "shares" in an organisation.

* **VC Fund** - Venture capital fund. These funds fund private ventures & startups. In the context of Solana Startups - VC funds negotiate and purchase SPL Governance tokens.

* **Voting** - voting on proposals submitted to the DAO. Voting power is usually based on the number of Governance tokens a wallet holds or their tenture holding these tokens.

* **Proposals** - Specific actions and decisions proposed by DAO members to be voted on and executed.

* **Treasury** - Community wallet which contains the Solana, Tokens & NFTs owned by a DAO. Usually a treasury is controlled by all members of a DAO. A treasurer can also be elected to mange the treasury.

* **Committee** - Key members of a DAO that have voting & proposal power.

#### DAO VS Traditional Organisation 

![DAO vs Traditional organisations ](https://3505330573-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F17Y4ZB0dl280NH9CAMkR%2Fuploads%2F9JhGN3Lvps5sEgCRrYnY%2FScreen%20Shot%202022-03-11%20at%209.54.44%20am.png?alt=media\&token=75af3586-e392-4c2c-8fd3-2371772a9939)

#### DAO UI <https://github.com/solana-labs/governance-ui>

#### Benefits of a DAO&#x20;

* Easy to setup
* No central leadership means responsibility is shared among members&#x20;
* No single member requires to work more than other members

**Risks of a DAO**

* Governance attack - using governance power to “play/take advantage” of the system
* Hiding business secrets/operations from competitors is a lot harder

### **Example Solana DAOs**&#x20;

Below is a list of DAOs currently listed on realms.today

**Yield Farming DAO** - Yieldvile - People need to come every day and harvest their yield. Yield Farming DAO have setup a Gamified version of staking

**Family & Friends DAO** - association (registered in the UK as a registered company) allows you to have a legal structure for your DAO & your DAO can own assets. Everyone who is a member&#x20;

**The Sanctuary** - place where the “fix” rugged collections

**GRAPE protocol** - create discord based community for Realms. First dao to bridge the gap between realms.solana with Discord

**Le DAO** - NFT collection DAO - creating & investing in a curated list of NFTs

DAO - realms.today CIVIC (KYC for DAO members) Identity

Community token DAO - Governance token DAO (SPL token) To create CIVIC KYC (know your customer) - create new proposal & chose CIVIC from “transaction” drop down

Making a proposal - “Execute instructions” (custom transaction)

###