Learn On SubDAO — What is the Importance of DAOs to Non-Fungible Tokens (NFTs)?

SubDAO Protocol
4 min readSep 1, 2022

NFTs and DAOs have great confluence, and both innovations could be greatly beneficial to each other in the coming years. Non-fungible tokens present a way for users to tokenize and hold digital assets on the blockchain while maintaining genuineness. Hence, people can have digital versions of all real-life items, including art, music, fashion, and even physical objects. Similarly, DAOs offer a new way of organizational structure; unlike traditional organizations, DAOs allow people from across the world to set up a virtual organization powered via the blockchain; hence, everything done is transparent and fair.

Hence, we can say NFT facilitates virtual ownership of valuable assets while DAOs facilitate virtual participation in organizations. Below are two important ways that DAOs have proven crucial to the functionality of Non-Fungible Tokens.

Community Decision Making: NFT projects gain popularity and increased value from community participation; in fact, the NFT community you belong to determines your reputation in the NFT world. For example, a community member of CryptoPunks or Bored Apes Yacht Club is held in high esteem by the rest of the crypto community, similar to exclusive membership clubs like the Carnegie, UK.

Many of these NFT communities have limited membership, which is determined by the number of NFTs in the collection; hence, if an NFT collection has 10,000 items, it means that the NFT is limited to a maximum membership of 10,000 people.

Hence, as an exclusive community member, each NFT holder is responsible for bringing in suggestions that will grow the community and maintain high repute while increasing the worth of their NFTs. For example, some NFT projects host global member-only events that can only be accessed by an NFT holder; hence, for a non-holder to gain access, they must purchase an NFT from one of the existing members; of course, very few people are usually willing to sell their assets, so, these NFTs rapidly increase in worth, as the community keeps providing value.

The value an NFT community produces lies in the strength of decision-making; it is important to remember that decision-making in blockchain communities must be decentralized; hence, DAOs become important. All NFT holders have an equal say in the community, so once a proposal is passed, each member can vote in support or against it in order to progress the NFT communities and make their NFT assets increase in value. The democratic nature of DAOs makes it so important for every NFT project to have a community DAO so that all members can contribute equally to the growth of the project.

NFT Investments: Investment DAOs (venture DAOs) are also important for NFT investments. Many times, we have blue chip NFTs that may be too expensive for an individual to acquire; however, venture DAOs help in this regard by allowing multiple people to pool funds together to acquire a single asset. For example, a CryptoPunks NFT that costs over $1 million may be too expensive for a single person to purchase; however, a community of people can come in a DAO, pool their funds together, and collectively own the NFT using a multisignature wallet that cannot be accessed without the approval of all members. Hence, they can all collectively benefit from an increased value and sell off if they want.

Also, this provides a way for more people to get into close tight-knitted NFT communities; from the earlier instance, if 20 people pool funds in a venture DAO to buy a single CryptoPunks NFT, then their single vote in CryptoPunks community proposals would be an aggregate of all 20 DAO members; this furthers decentralization and helps to facilitate widespread decision-making.

Click here for further reading on venture DAOs.

In Conclusion

It is evident that many blockchain-associated technologies will overlap. We can see the many intersections of key sectors, including DAOs, NFTs, Metaverse, and fungible cryptocurrencies. Ideally, none should stand alone; to enjoy a seamless Web 3.0 world, the seamless intersection of these industry sectors is crucial.

About SubDAO

SubDAO is a multi-chain DAO protocol. It allows any decentralized organization to swiftly create and manage DAOs. We are committed to serving as a Web3.0 entry by providing blockchain-based digital agreement signing, DAO social networking, asset management, and other tools and services.

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. SubDAO has completed multi-million dollars financing from dozens of institutions including Hypersphere, Huobi Ventures, OKEx Blockdream Fund, as well as investment by Messari founder Ryan Selkis.

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SubDAO Protocol

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