Ookiversity: What is a DAO?

Ookiversity: What is a DAO?


Ooki is a fully decentralized autonomous organization (DAO). DAO's are generally defined as decentralized organizations that are led and governed by community involvement and utilize blockchain based smart contracts, and decentralized governance. This Ookiversity lesson will explain how DAO's work, and why there are so many DAO being formed in the cryptocurrency space.

What benefits do DAO's offer?

DAO's enable communities to coordinate and work towards a common goal at a global scale without relying on trust or third parties. DAO's typically do this by leveraging blockchain smart contracts in order to program software-based mechanisms for aligning incentives.

DAO Governance Processes

The design space for DAO's has expanded as thousands of new DAO's are being formed. These DAO's decide on rules that govern DeFi protocols, NFT projects, blockchain applications, and much more.

DAO's typically utilize on chain token voting for decision making. Each DAO has it's own unique set of governance rules that it follows which are specifically suited to the needs of each organization. The scope of protocol changes that token holders can make for each protocol vary depending on the individual rules of each protocol. For example, with Uniswap protocol, token holders can vote to adjust protocol fees, or spend treasury funds.

DAO enables individuals to have aligned incentives and implement protocol changes which hopefully lead to the success of the underlying organization. Many DAO's are structured such that the number of tokens a community member controls corresponds to the community members voting power. Anyone from the community can submit proposals which are then discussed and voted on through Snapshot and onchain governance voting.

For proposals to pass and become implemented they must first successfully pass through the entire decision making process, typically this process contains multiple steps including community discussion in a forum discussion, snapshot vote, and on chain vote. In order for users to participate in the on chain voting, it typically requires a web3 browser extension, mobile wallet,  and a web3 wallet containing DAO tokens to vote with.

After governance processes have been completed the necessary protocol changes are deployed to the blockchain and become active. Once these smart contracts are deployed to the blockchain they can no longer be altered unless a new governance process is completed wherein the previous rules are amended or changed.

One of the commonalities among DAO's is the transparency and trustlessness involved in the DAO governance process. All vote records are stored and visible on the blockchain for anyone to see.

DAO Vote Delegation

Certain DAO's also allow tokenholders to delegate their votes to other members of the community. For example, ENS DAO, Ooki DAO and Optimism DAO all allows users to easily delegate their voting power to other community members who can participate in governance on their behalf.


In the future creating DAO's will become an easy process that only takes a few seconds. Additionally, the tooling available to easily manage and govern DAO's will continue to evolve. For example, Tally, DAO Haus, and Colony are a few examples of DAO tools available today that will help bring DAO's to the masses by improving the governance process and community coordination.