Well that’s a great question. A Decentralized Autonomous Organization or DAO is a group of of people, ideas, things, etc. without a centralized control. Rather the control is ‘decentralized’, among all of its members. Think of it like a company, but without a board of directors, CEO, or any management really. Just employees. The employees decide wat the company is going to do, and then do it.

Why is this concept so powerful? Well, many reasons. It is the ultimate democracy. Additionally, because it is decentralized, there is no regulation. This can be and is both a good and bad thing. Liberating, but chaotic. Imagine a company with no borders, no government intervention, no rules,, …. and no direction. On first blush it may seem like that would be chaos incarnated. So the first thing you have to do is to establish some structure and rules.

Rather than drone on about what a DAO is, I’m going to go back and let my friend Theodore give you a quick primer.

So, as you can see, a DAO can be good or bad. It is entirely up to its members.

One of the coolest things about DAO’s is the ability to vote. Using cryptography the organization and its members can create proposals, vote on proposals, and then initiate them based on the rules the DAO membership decides on.

When creating a DAO, there are a few things that need to be decided up front. Is the DAO going to be a membership, or company structure. What’s the difference? A membership DAO has a one member, one vote structure. A company DAO issues a number of tokens, say 100 and then individuals can obtain them. The more tokens they hold, the more weight is assigned to their votes. Similar to a company, anyone that has 51% of the tokens can essentially decide the outcome of any proposal or vote.

The other cool and necessary aspect about a DAO is its Treasury. A DAO’s treasury is a purse of money, in this case cryptocurrency. The members of the DAO can then decide, via the voting system infrastructure, what they should do with those funds. It could be a charity, where all the funds go into a pool, and then the members decide where they will be spent and for what purpose. Or a start up company where the employees get paid out of the treasury automatically upon completing a task or project, and then the revenue from that project go back into the DAO. Like the vending machine example. Really the possibilities are endless.

So why do I bring this to your attention dear reader? Well if you have made it this far into my little adventure, you may very well have guessed by now. I created a Crypto Token, and an NFT, so yes, of course, there is a Colorado CodeMedics DAO!

It is a Membership DAO and just by owning a CodeMedic NFT, you are already a member. Your CodeMedic NFT is your secret membership card into this very cool new organization.

I have taken the liberty of setting up the DAO, seeding it with some capital, and setting some initial ground rules.

How do I get to the DAO and what can I do there?

The CCM DAO link is above.

When going there you will need to connect your MetaMask Wallet so that the DAO can see your NFT Membership card and let you in. Actually, anyone can get in, that is one of the things about DAO’s, they are pubic, on a public blockchain. so actually anyone can see the DAO, and its code, but only Members can make proposals, vote, and access the treasury.

On a laptop or desktop, you should see a button on the top right to connect your MetaMask wallet. Make sure you are logged into your wallet, and you have the Polygon Blockchain selected as the network. (you can have a DAO on any blockchain that supports smart contracts and I chose Polygon because the transaction fees are so low). You may know about Ethereum gas fees right now ad PHEW, - no thank you.

Ok, this seems like a good place to talk about transactions, and transaction fees (Gas)

Knowledge rabbit hole. If you know about this already - just skip down to the next section.

Transactions occur whenever anyone wants to write to the blockchain or execute a smart contract. Transactions are picked up by blockchain miners and put together in a block. Then depending on if the blockchain uses proof of work (Bitcoin) or proof of stake (Polygon), the miner will process the transaction and promote it to the block. In order to have your transaction included in any particular block, you must pay a transaction fee, known as gas, to the miner that processes the transaction. If you want to learn more about POW vs POS, once again Theodore is a good resource and he has a video on it here.

Those transaction fees can go up or down, depending on how busy the particular network is.

Bitcoin transactions usually cost about $12, which is why it does not currently function well for money. Bitcoin also does not currently support smart contracts.

Ethereum was the first blockchain to support smart contracts, and as a result is often very busy. It has become a victim of its own success and to get a transaction through on the ETH network can sometimes cost more than $100. Yes for one simple transaction! As a result, over the last several years, many Layer 2 technologies have been developed.

Polygon is one of them and a transaction on polygon typically is about .001 cents. Yes, that is why I chose it.

What if my transactions fail?

As stated above, if the network is busy, your transaction using normal gas may fail. Each block on the blockchain can only hold a certain number of transactions. If the demand outweighs the supply, then gas goes up and vice versa. One of the things you can do to get your transaction to not fail, is to ‘bribe’ the miners to take your transaction over someone else by increasing your gas ‘offer’ or promoting your transaction.

MetaMask does a good job of handling this by allowing you to adjust your gas offer. It will offer market rate. if you click the market button on the top right of the transaction you can adjust this to higher if you want your transaction to happen faster, or less if you don’t care. If you offer less, your transaction will fall back in the cue until the network is less busy, usually at night, or will eventually fail. See screen shots below

As you can see, the cost to fund the prize wallet was .003 Matic or 4 tenths of a penny. If you want you can increase the fee to “aggressive” and pay .004 Matic or 6 tenths of a penny the transaction will likely not fail and go through faster. (I don’t know, that’s more than 1/2 a penny and too rich for me!)

You have Matic!

I almost forgot, so in order to play with the DAO and create some votes, you will need some gas. Matic is the native coin for the Polygon chain and in addition to the NFT you have, you should also see 5 Matic in your wallet. (about $6.80 at the time of this writing). Woo Hoo!

Whats next?

If you are playing this little adventure via a smart phone, you will need to access the DAO from within your MetaMask app’s internal browser. Open MetaMask, and then in the menu you will see a browser command that will let you go to any website. Copy and paste in the link there.

When you first get to the DAO, you will see the four options that the DAO currently has to offer.

Assign Tokens: This allows the membership to assign new members. It created a vote that must pass in order to execute. Currently it is autonomously set up to provide membership to anyone that owns a CodeMedic NFT.

Vote: Just like you think it functions, the vote button allows you to create a vote proposal as well as vote on current proposals that have been put forth. Currently there is a 15% promotion threshold and a 51% approval threshold. That means that any vote proposal needs at least 15% of the membership to approve the proposal, for it to carry enough weight to warrant an actual vote from the entire membership, and a 51% ‘Yea’ requirement to pass. There is also currently a seven day voting window.

Check Finance: This is also just as it sounds. It allows all the members to see what funds are in the treasury.

New Payment: This allows members to put forth a proposal to spend some of the treasury funds. Its use creates a proposal and once approved the funds are automatically moved based on the initial proposal parameters.

Why I think this is so cool and powerful.

Because all of these parameters can be changed, simply by putting forth a proposal and having a majority of the members approve. The members can even change the majority requirement, having proposals execute with only 10% approval, by creating a proposal….. - see - mind blown!

OK - so go in, look at the current votes, and create a proposal of your own, for anything……

Oh, and you will also see a gear in the top right. Click that and choose Notifications. Here you can assign an email address that will fire off notifications to you if a new proposal is created as well as the status of votes, so you don’t have to manually check back

Go ahead and play around. When you are done, come back here and click the button below for the next riddle.