Often, prospective DAO creators ask us to help them decide whether they should fund their DAOs using:
Option 1: A non-fungible token, NFT, like the ones listed on OpenSea.
Option 2: A fungible token, like the governance tokens that entitle holders to vote on the DAO’s decisions.
The reality is that it doesn’t have to be an either/or decision. You can do both at the same time. Or you can offer one, and then the other. Or you can offer one, but not the other.
This isn’t like picking between Coke or Pepsi. It’s more like being offered salt and pepper and other seasonings.
Let’s understand it better with an example. A new DAO might say to its 500 genesis members, “We’re effectively all the founders of this DAO. We’ll create 500 NFTs that our DAO will sell for 1 ETH each. That money will be our DAO’s startup capital, and each of us will have an NFT that designates us as founding members.”
That NFT might even come with a promise of governance tokens, once those are available. Until then, the 500 members can use their NFTs to give them access to a private Discord group, where they can create a plan to fundraise by creating and selling a governance token to a much larger audience. That next round of funding might include the sale of a new NFT, which shows that they participated in the second round of fundraising. Or it can choose not to issue more NFTs.
For the first year of the DAO’s existence, it could say that only holders of its genesis NFT can vote on committee members. It might do that to give the DAO’s governance a chance to establish a foundation before being open to more voices. Many of our clients use an NFT as a non-transferable proof of membership and a token as a quantity of voting power.
The point is that DAOs have choices when it comes to what they sell, how they sell it, when they sell it, and more. Frankly, that’s why Origami is not a self-serve software company, even though we were founded by experienced software entrepreneurs. Software and tools aren’t enough. DAOs need guidance through all these options and decisions.