Creator DAOs: What You Need to Know
As the hype around NFTs (Non-Fungible Tokens) continues, creators are finding new ways to connect with fans and monetize their content like never before.
At the core of this Creator Economy revolution lies the concept of the DAO — short for Decentralized Autonomous Organization.
From the biggest celebs to lesser-known influencers, Creator DAOs are the new kid on the block. Let’s explore what this means and why it matters now.
More on DAOs
DAOs have started to become popular within crypto circles and have taken center stage in 2021.
Initially, they started as groups of individuals with a common interest, working towards a common goal. To reach this goal, the group would have distributed access to capital, which they would use to fund initiatives based on members’ votes and in line with the purpose of the DAO.
Each DAO, as a community, has its own token which grants holders governance rights, membership, and associated benefits. The weight of each member’s vote is typically based on the amount of tokens they hold (although there are different approaches to this).
Initial use cases for DAOs revolved around:
- Investing DAOs: where members collectively vote on which crypto asset to invest in, when to buy and sell, and redistribute profits to the community.
- Collector DAOs: where the group decides on on which artwork — usually NFTs — to purchase. Similarly, any proceeds from selling the NFTs is then shared amongst the members, according to the terms of the DAO.
- Social DAOs: these are simply interest groups where people’s main motive is to forge new social connections and expand their personal networks.
The DAO landscape evolved into a complex picture of varied purposes.
In all these scenarios, the DAO’s role is to coordinate resources, capital, and people in order to meet its goals.
DAOs have been called “the foundation of Web3, the Creator Economy and the future of work” given their potential to disrupt the way organizations of all sizes and shapes operate — from brands, to corporates and non-profits, to individual creators.
The web is therefore moving away from a tool to democratize access to information, to a platform for distributing wealth amongst self-sustained communities.
In this varied landscape, Creator DAOs are emerging as the new trend. Here’s why.
Defining Creator DAOs
As you might have guessed, Creator DAOs are one flavor of DAO amongst many others.
Specifically, a Creator DAO is an exclusive community that brings together a creator’s trues fans.
Only users who have passes can access this exclusive club — usually, the access pass comes in the form of an NFT from the creator.
For creators, DAOs can provide a new revenue stream that doesn’t depend on big tech platforms, and isn’t subject to their control, limitations, and censorship.
As for fans, by holding a token of the creator(s) they support, they are no longer passive followers and content consumers: they become active stakeholders and owners of the creator’s micro-economy. When demand for the creator’s token rises, for whatever reason, early backers can benefit by selling those access tokens to other users who want to join in the DAO, and turn a profit.
A recent example of this has been IreneDAO — an Asian social media influencer who saw DAOs as a way to break away from the centralized tech platforms, and to connect with fans in more direct and meaningful ways.
Fans who purchase these NFTs will get exclusive access to her DAO. The benefits could include things like:
- Direct access to the creator.
- Early access to events, new products, and releases.
- Discounts on merchandise.
- Voting on the creator’s next event or release.
- Exclusive items only available to members.
- And more.
This model stands in stark contrast to traditional, centralized creator platforms.
On those, creators spend hours producing content to attract viewers’ attention, for the big tech firms to monetize this attention and only throw pennies back at the creators…Whilst, of course, the users themselves don’t get anything in return — although those platforms wouldn’t exist without them.
With Creator DAOs, both creators and fans share value and benefit from consuming and promoting the content, thanks to the token dynamics at play.
How to Set up a Creator DAO?
There are a few things to watch out for when it comes to DAOs, and it’s important to consider various factors when setting up your own — whether you’re a commercial organization, brand, or individual creator.
Any legitmate DAO needs to include:
- Legal entity with clear terms & conditions: so that members know exactly how value will be distributed and on what basis.
- Token distribution schedule: so the release of tokens is well planned out, as supply and demand will impact the price.
- Communication channels: so that members have an exclusive space to meet and converge (this could be as simple as a private channel in a Discord server).
- Governance process: for members to vite on key issues relevant to the DAO’s purpose.
- Community treasury: so that funds can be allocted based on members’ votes.
DAOs which haven’t formalized these elements stand on shaky ground, and members could get in trouble when funds are misued and they have no legal recourse whatsoever. And all of these elements are blaringly lacking in initiatives such as IreneDAO, fueled by nothing more but the hype around creator empowerment and NFTs.
So, there’s a lot to go after. If you’re a brand or creator, how do you get started?
You go try to go it alone, spend hours arguing about the legal aspects and practicalities of setting up a DAO, debating tokenomics design, not to mention how to market your DAO and grow its membership.
Or, you could use a “Creator DAO-as-a-Service” platform that handles this entire process for you: from launching the access tokens to giving you an exclusive outlet to connect with your fans.
As the market for DAOs in general and Creator DAOs specifically expands, we are seeing new players provide such services. They include the likes of WhaleRoom and Coinvise.
It’s apparent that NFTs and DAOs aren’t just passing trends. Those concepts have been tested and iterated on for years, and are only now coming to the forefront.
With the potential to empower content creators and fans like never before, Creator DAOs are the ultimate icing on the cake. It will be fascinating to watch this space evolve as new service providers emerge and creators of all kinds experiment with the technology.