There is an ongoing synergy that shows that NFTs and DAOs could have more in common than previously known. While the two terms exist independently of each other in Web3, they could potentially show how businesses could operate and set themselves up for better customer service in the future.
- DAOs and NFTs are distinct but important concepts in web3.
- DAOs could become vital to the emergence of NFT projects by offering a sense of community.
- This interdependence could also prove useful for businesses seeking to increase consumer engagement and increase revenue.
DAOs and NFTs are Distinct
Decentralized autonomous organizations are largely regarded as the next level in the evolution of organizations. In the DAO, organizations are flat, and hierarchical structures no longer exist. This also means that every member of a DAO can effectively participate in a project’s decision-making process. You can learn more about DAO here.
On the other hand, non-fungible tokens offer a permanent way to represent valuable items such as art, properties, and more on the blockchain. NFTs also provide a way to claim and prove ownership of assets and products on the blockchain. You can learn more about what NFTs are and how they work here.
There is a point of convergence between DAO and NFT, despite the clear difference in what they represent.
How DAOs and NFTs relate
DAO could be beneficial to the scalability of an NFT project, and proceeds from NFT sales could be used to achieve DAO roadmaps. This is the point where a DAO and an NFT project intersect.
It is a common phenomenon that new NFT projects struggle with publicity and sales. However, having a vibrant DAO in this instance could go some way in creating a buzz around such an NFT launch and the benefit of such a collection to art collectors. DAO community members could fill this publicity void by using their existing channels to talk about the collection and discuss its values and essence across digital spaces. This can lead to sales for such a collection. It can help raise needed funds for project development.
Similarly, NFT could be a vital source of revenue for a DAO. DAOs could launch NFTs as gated tokens for community activities and governance. This way, funds from NFT sales can contribute to the DAO treasury. Such funds could be used to further achieve the set goals on a DAO’s roadmap.
A Clue for Businesses
Traditional businesses can leverage DAO and NFT to scale, engage users, and grow revenue. For this to happen, they must be willing to launch DAOs and use NFTs. Businesses can launch NFT as PFP or create collections as gated tokens.
PFP NFT can be useful in creating a vibrant online community. Essentially, PFP creates a sense of community among collectors, who could consider themselves to be part of a select few. This strategy has proven to be effective in projects such as BAYC and Cryptopunks.
Furthermore, PFP could qualify a collector as a member of the issuing project’s DAO. This way, collectors could take part in the decision-making process for the project. They could also have the opportunity to directly work with the project team and contribute to shaping the future and direction of the project.
As a rule of thumb, there is a high possibility that the community will continue to identify with a project that they are a part of and actively contribute to its development. This relative interconnectedness is where DAO and NFT could come in handy for Web 3 projects.