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Designing a DAO: Insight from the VitaDAO Team

Systems design
Designing a DAO: Insight from the VitaDAO Team
Date Published: 05/30/2022
Date Modified: 06/23/2022
Systems design

DAOs are relatively new forms of organizations that use blockchain technology to function in a decentralized, autonomous way. Like traditional organizations, they serve a variety of functions, such as supporting non-profit projects, community-based organizations, biotech research, and investment funding. The intent of these organizations is to be community owned, cause or mission focused, and a new way to use digital collaboration to achieve goals.

LLP Vitadao
Visit the VitaDAO website to learn how you can get involved.

According to research by, the current total treasury of DAOs is in the region of ~$10.5 billion (USD), with the top three DAOs holding approximately ~$5.7 billion of the total treasury.

As people continue to learn more about DAOs and how they operate, more individuals and groups may seek to set up such organizations to create solutions in a new way, utilizing the power of the community.

Why consider creating a DAO?

DAOs have some suggested advantages over traditional forms of organizations that may make them more suitable for specific types of activities. DAOs use a smart contract system, which involves pieces of code that are written on the blockchain and help a DAO to function autonomously.

For example, when a proposal is voted on and passed, it can enact a change automatically. This makes the system less likely to be subject to bias by a human party.

In addition, DAOs are often a solution for solving unusual social problems. For example, Heritage DAO was able to purchase two pieces from a museum and allow them to continue to be displayed.

Tyler Golato, Co-Founder of Molecule, believes that โ€œThe most important goal when building a community is to have strong alignment on mission, vision, and values.” When this occurs, a DAO can begin its work effectively and focus on its mission.

How a DAO is created

Creating a DAO requires the combination of technical elements, a strong mission, and a community to back it.

First, the creation of a DAO starts with a concept. At this stage, itโ€™s important to think how viable that concept is; anyone interested should check the market for similar ideas and flesh it out so it becomes more defined. The best starting point may be “why do you want to start this particular DAO?”

Second, the basic components of a DAO must be determined. This include its:

  • Mission: this is the reason the DAO was formed and what holds the community together.
  • Voting mechanism: there are many types and no one correct form. Such mechanisms may involve token-weighted voting, rage quitting, liquid democracy, and conviction voting.
  • Governance/native token: this allows the community to have a stake in the DAO, usually in the form of a native token. For example, VitaDAO uses $VITA.
  • Community: the backbone of the DAO; without an active community of like-minded people, a DAO cannot function.
  • Fund management system: this is where the DAO stores its funds, usually in the form of a digital wallet.

These elements are required so that they can be encoded onto the blockchain to form the basis for the DAO.

The third aspect is the technical issues. There are several ways to approach the technical side of creating a DAO, depending on the platform. Some of the major ones are Aragon, Snapshot and DAOstack Alchemy. Once a platform is selected, the next steps generally include. Acquiring an Ethereum Name Service (ENS) domain and paying the gas fee, then creating an organization and linking it to this domain. The DAO is then customized based on its mission and governance structure, then it is tested for functionality.

Fourth, once the DAO is launched, community members and external parties will be able to interact with and participate in the DAO. At this stage the DAO may begin to realize its mission.

Of course, no organization is perfect, no matter how well-planned it may have been. As the market and world changes, the DAO can choose to implement changes to its system, usually via community voting.

VitaDAO’s experience

VitaDAO is a biotech DAO focused on funding early-stage longevity research. The DAO evolved from Moleculeโ€™s decentralized structure to become a standalone DAO. Molecule’s co-founder, Tyler Golato, explains this DAO’s experience:

We started out by identifying a great first project to fund, speaking at academic conferences, and leveraging our pre-existing network to attract academics to the organization around a shared vision of democratizing longevity therapeutics development. Once a scientific and academic culture and community began to form, it became somewhat unstoppable.

He says that one of the key factors for this is the low gatekeeping, allowing talent to be continuously attracted to cooperate with the organizationโ€™s initiatives.

To form the organizationโ€™s treasury, the group looked to a multi-signature Gnosis Safe wallet managed by the core team, VitaCORE. Although not decentralized in the strictest sense, core team members aid the functionality of the DAO at its current stage and allow it to grow and further decentralize incrementally.

The DAO also developed internal working groups covering the areas of Legal, Awareness, Longevity, Governance, Operations, Tech, and Tokenomics in order to aid the DAO and scale effectively.

The DAO’s funding process is permissionless. Anyone with a proposal can apply and go through its approval system, first with the Dealflow Working Group and then with feedback from the VitaDAO community in Discourse. Successful applications move to a formal Snapshot vote with $VITA token holders.

VitaDAO isnโ€™t the only example of a functional DAO stemming from the Molecule team. Other branches include PsyDAO, which aims to make psychedelics unmonopolizable, and LabDAO, which focuses on DAO-based community laboratory services.

For people thinking of developing DAOs

Tyler Golato believes that the first step that any start-up DAO should take is to โ€œestablish a clear mission, vision, and objective(s).โ€ After this step, it’s all about finding the community to support the DAO, starting with the core team. He also states that itโ€™s important to:

align with others in the space that have already built similar organizations. Molecule, for example, is actively helping builders that wish to use the IP-NFT framework in their own organizations. We are beginning a small program to give grantsโ€ฆwith a goal of building biotech DAOs.

However, while the innovative technology provides potential, caution should be exercised to ensure that a Web3-facing and token-based system works and has a clear community and mission before being presented to the public.

About the author
Maria Isabella

Maria Isabella

Maria is a writer and editor with a passion for technology, health, and lifelong learning. With over 6 years of experience in content creation for the fintech and wellness industries, and 10 years in the non-profit sector, as well as a Masters of Science in Development Management, she is passionate about combining tech and healthcare to make the world a better place.