Learn on SubDAO: How NFT&DAO Work Together?

SubDAO Protocol
9 min readSep 17, 2021

After generating more than $2.5 billion in transactions in the first half of 2021, sales of these blockchain-based contracts (I.e., NFTs) have fallen sharply due to increasing criticism of the environmental impact of Ethereum, which is home to the vast majority of NFT trading activity, and the sound of the bubbling market for NFTs.

But fast forward to the past few weeks, NFTs are making a comeback with a host of new NFT projects and trends making headlines.

Fragmented NFTs have been appearing for months, but they have recently gained notoriety.

While cryptocurrency billionaires are gleefully snapping up Bored Apes and CryptoPunks, these NFTs priced millions are well beyond the afford of the average cryptocurrency user. But unlike traditional art, a single NFT can be fragmented and split into multiple (cheaper) sections for the less affluent.

Many cryptocurrency users are coming together to buy NFTs in the form of DAO (Decentralized Autonomous Organization) to enter this new asset class. They even auctioned off an original NFT image of a prototype of DogeCoin’s avatar, pushing the value of the entire NFT image to $302 million.

In June 2021, Atsuko Sato, owner of doge Coin(Dog Coin) prototype wood dog, minted this prototype image of the dog coin into an NFT and sold it to the experimental arts DAO organization PleasrDAO for a record $1696 ETH (then about $5.5 million), after which PleasrDAO fragmented the NFT into billions of pieces.

Can NFT be monetized and governed in a better way through DAO? In this event, we will focus on what NFT and DAO are, what differences they are, and how they can help each other.

What is NFT?

NFT stands for irreplaceable tokens. There are two keywords to explain it- replaceable and token. If something can be replaced by something else, it is replaceable. My $1 note can be replaced with another $1 note. It doesn’t make any difference. One bitcoin can be replaced with another and its value doesn’t change, while the ownership changed. If an asset can be replaced, it is replaceable.

Now we talk about tokens. Tokens are assets represented on the blockchain. Bitcoin is a token, so are Ethereum, Dogecoin, and other cryptocurrencies. They are all assets on the blockchain. What’s the point of building them on the blockchain? It will increase security and transparency by placing assets (or tokens) on the blockchain. In addition to cryptocurrencies, tokenized assets can also be used to create financial identities, solve bank-free problems, finance on the trade.

Bitcoin is a token, so is the NFT. But they are different. As I said before, one bitcoin can be replaced by another. However, NFTs cannot be replaced due to their uniqueness and only belong to the only one person. But this person can sell NFT to another person. NFT can be regarded as a collection, like a magnificent ancient painting hanging in the Louvre, or a bottle of Cote de Nuits wine, or Crypto Kitties’ Flamandia digital cat. They are just similar things.

The reason why each token has its value is that each NFT is unique. NFT is created and sold by a wide range of artists from digital artists to rappers. These tokens are also slowly being integrated into DeFi or decentralized finance.

What is DAO?

Now, let’s go to the DAO. DAO is a decentralized, autonomous organization dedicated to a specific function. It was created on a blockchain network to be an autonomous organization that provides governance which was originally developed on open-source code or computer programs. Ultimately, DAO development provides governance for both members and code.

There is no hierarchy in a DAO, neither the executive committee for the president and vice president. Decisions are made in a basic community instead of the top. The consensus was achieved through voting, similar to corporate-level voting, while voting in DAO is based on ownership of assets(Tokens). This is how tokens come into effect in the digital world.

Cryptocurrencies or digital assets are used to maintain the decentralized nature and governance of DAO. Every major decision in the DAO is made by voting. Members vote based on the tokens they hold. Tokens are distributed through a vault.

In the early days of DAO, founding members were given newly mined tokens. Since DAO is new, these tokens have no market value. As DAO becomes useful and governance becomes critical, the value of tokens increases. New members want to join the DAO for decision-making, but without DAO tokens, they cannot participate in governance.

Because DAO is not bureaucratic and code-based, it can be easily created. If members within the DAO do not believe that they are working, they can leave and create their own DAO. In addition, this exit can be split or “forked” DAO. This means that blockchain will be hard-forked into two separate blockchains using different cryptocurrencies.

In short, DAO is a decentralized community that works toward a specific goal without hierarchy and token-based decisions.

Example of an NFT DAO


PleasrDAO is an NFT DAO that was created as a way to co-collect funds for the purchase of high-value NFT (Non-Fungible Token). PlasrDAO members share the total costs and ownership of digital assets.

We live in a world where an ape just got elected to the board of a 9-figure DAO based on nothing more than his high school student council credentials and his love of NFT’s.

What a time to be alive.@PleasrDAO ✨

— gmoney.eth (@gmoneyNFT) June 23, 2021

PleasrDAO was previously built to collectively purchase Uniswap V3 NFT artwork, called “x-y-k”, designed by @pplpleasr1 to celebrate the upcoming update of the most popular DEX-Uniswap.

PleasrDAO will continue to buy and commission NFT artworks, also invest in decentralized finance and run an incubator to advance its mission. The current goal of PleasrDAO is to expand collections, incubate new cryptocurrency products and artists, and invest angels in the cryptocurrency market.


Flamingo is a DAO whose main activity is to research and leverage emerging investment opportunities in digital assets on the blockchain and develop DAO’s finances. FlamingoDAO believes that blockchain collectors are the new wave of merchants and curators. In their view, this shift in thinking about ownership of digital property will play an important role in creating markets and consumption patterns for unique and currently unknown digital content.

NFTs make you feel like a kid again 🫂

— 🦩FLAMINGO🦩 (@FLAMINGODAO) July 6, 2021

FlamingoDAO’s goal is to gain a strong foothold in the cryptocurrency market, especially in the wide blockchain art market recently. FlamingoDAO is very concerned about its members (currently limited to approved investors under U.S. law) who have the opportunity to incorporate their NFT assets into the DAO’s treasury after joining DAO, in which they can obtain a line of credit backed by digital assets.

Upon becoming a member of the DAO, investors in FlamingoDAO are entitled to various benefits. They can display their NFT in the DAO Digital Gallery; safely store the NFT in DAO’s vaults, divide them, or as mentioned earlier, use them as collateral on other DeFi platforms. It is up to the way new members select, because one of the basic principles of this DAO is the decentralized and distributed formula, and no member has full and separate control over the future of FlamingoDAO.

Users can also become the owner of the rare CryptoPunks through the NIFTEX Fragment Market. Where users can also buy fragments of the apes CryptoPunk and zombie CryptoPunk here.


Most of the NFT DAOs currently in the cryptocurrency market are concentrated in widely understood works of art and art forms. However, this is over the possibility. YGG DAO chose a completely different niche market in the NFT market, actively investing in and managing in-game assets for NFT games.

If you haven’t read the YGG white paper, here is a short article with 4 key takeaways! https://t.co/hQ79QfGoIa #tldr

— Yield Guild Games (@YieldGuild) June 30, 2021

In March 2021, YGG DAO received $1.325 million to develop its concept. The round of financing was led by Delphi Digital, a digital asset research firm, with Scalar Capital, BlockTower Capital, and others joining in. YGG intends to buy more items in NFT games, buy plots and areas in these games, and invest in the so-called “virtual world” or “meta” economy.

However, YGG’s main focus is to explore the “game money” concept proposed by Axie Infinity, which allows players around the world to earn money simply by playing games and defeating opponents. YGG sees the advantages of NFT games over its art partners.

Items in the game have intrinsic value because they are the most basic and necessary part of any economy in the game. Every MMORPG player understands that every independent game world is a completely different economic system. YGG DAO wants to take advantage of these economic systems. A significant advantage and change come into this game. The relationships between game developers and players are that YGG enables players to become investors and work with guilds to buy land and tokens in games in which they are actively involved. In human history, such a player structure has become a milestone, and this is just the beginning.

NFT And DAO in the Ownership Economy

NFT is an asset, and DAO is the way organizations are managed. So how do they work together? What they have in common is ownership. Both NFT and DAO emphasize ownership. NFT provides ownership for creators and DAO provides governance. Creators can place a piece of art, music, or content on the blockchain which ensures the authenticity and security of the assets, as well as the buyer’s unique ownership.

Where DAO helps NFT is in its decentralized community governance. The combination of DAO and NFT creates a new form of decentralized media and investments available on the Internet. This will be owned by the NFT creator and operated by the DAO token holder. According to Patrick Rivera, a programmer at mirror.xyz,

“This a decentralized publishing platform, and this new media structure will be a product of the public and its producers, without limiting participants to one company. These media companies can be seen as collectives with their own identities, encouraging creators and consumers to move interdependently across groups. All of this leads everyone to invest in each collective development and share the collective upside value. ”

DAO enables NFT creators to come together. NFT creators can be broadly divided into two categories — individual or collective. Pop artists like The Kings of Leon or Grimes can cast, mine, and sell their NFT, and they already have followers. But the newly promoted artists need a collective unit. This collective helps crowdfund, invest, support, market, and ultimately pay collective token holders and it can be managed through DAO.

How does a collective NFT and DAO work?

As mentioned earlier, NFT is a unique asset for digital, and DAO is a way to manage the community. In a collective NFT DAO, the creator creates NFT, and the DAO runs its lifecycle.

Since it is a collection, once the artist creates the NFT, it will be sold to the DAO. DAO will mine its token (from the treasury) and convert it to NFT. These NFT will be used to support tokens issued (as collateral). If NFT is valuable, so are tokens. As a result, DAO can sell NFT to stakeholders in the event of a liquidity event. The system ensures that tokens are valuable over time.

NFT gives tokens value, while tokens give DAOs a voice in governance. Tokens issued in DAO are not only practical but also have a monetary value. The utility comes from a separate link to the DAO. Token holders can vote and make decisions with tokens. This is the utility of DAO tokens. However, because tokens are supported by NFT (with real-world value), they also have value.

Just as shareholders of a company own a portion of the company, a token holder of such a DAO owns a portion of the DAO. As Rivera puts it, this allows for “universal sharing of ownership of the NFT of the creator.”

DeFi is paving the way for a more fragmented future. NFT and DAO is the two key pillars in content creation, ownership, and governance. This event just describes what NFT and DAO are and how they work together. In the world of decentralized finance and cryptocurrencies, we still keep learning, and see you next time!

About SubDAO

SubDAO is a DAO infrastructure based on Polkadot, where any decentralized organization is allowed to conveniently create and manage a DAO. SubDAO does not only connect DAO with DApps to realize DAO’s cross-chain management but also bridges Web 2.0 and Web 3.0.

The founding team of SubDAO is composed of the former Technical Team leader of the IBM Group and many early well-known developers from Polkadot. All team members own rich experiences in Internet companies such as IBM, Tencent, and Alibaba. Jack Platts, former Director of External Cooperation of the Web3 Foundation and Partner of Hypersphere Ventures, serves as a strategic contributor to SubDAO. So far SubDAO has completed multi-million dollar financing including Hypersphere, Huobi Ventures, and other institutions.

Follow SubDAO

Website: https://subdao.network

Github: https://github.com/SubDAO-Network/


Twitter: https://twitter.com/subdao_network


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SubDAO Protocol

SubDAO is a DAO infrastructure that helps manage digital assets through middleware, multi-sig, and other decentralized features.