Sustainability: What do DAOs need to be successful in the long term?

The growing presence of projects identified as DAO begs the question: what makes them sustainable over time and technological changes?

The growing popularity of Decentralized Autonomous Organizations (DAOs) reflects the growing trend of creating community-driven projects within the Web3 ecosystem.

Basically, a DAO is an organizational structure that enables decentralized decision-making within a community.

Currently, there are over 4,000 such projects, according to DeepDAO registration data. With new tools available to make DAOs easier than ever, quantity can easily outweigh quality within these communities and it begs the question of what will make these projects relevant in the long run.

The basic structure of decentralized organizations seems to be similar to any other tech startup: it requires a value-added service or product, a community of users, treasury, a business development plan, and marketing.

Speaking to Cointelegraph, Santiago Siri, founder of Proof-Of-Humanity DAO (PoH DAO) – the issuer of the Universal Basic Income (UBI) token – shared his special ingredient for making DAOs sustainable: an engaged community:

"After building a participatory community, we can find funding mechanisms, alliances with other DAOs, governance and participation mechanisms, etc. But without community, the DAO is not real."

The emphasis on community is repeated throughout the Web3 space, but simply having a group of people signed up for your project won't be enough to make it thrive.

As Siri explains, the real priority of a DAO is to give that community a purpose from the start. “What usually happens with a soulless project is that a group of mercenaries will get away with the money without generating any value,” he said.

The community as the basis of a decentralized structure also supports another rather important aspect...