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DAO-enabled NFT Platform

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It’s astounding how JPEG images, video clips, and memes are fetching millions of dollars; people are buying digital land and houses, and brands are selling virtual clothes and cosmetics. With such overwhelming demand for non-fungible tokens (NFTs), the total market cap for NFTs reached $41 billion by the end of 2021 (according to Chainalysis’s data).

The value of revenue is expected to exceed $35 billion by 2022 and $80 billion by 2025, according to the data from DappRadar. NFTs have been redefining various industries through digital asset tokenization, creating exciting opportunities for traders, investors, and enterprises worldwide. Millions of NFTs are created, minted, bought, and sold daily across the diverse NFT marketplaces.

Each NFT marketplace platform is unique, delivering different benefits to users. Some platforms focus solely on offering a trading marketplace where individuals can showcase their collectibles via NFTs and further engage in NFT trading. Other NFT platforms allow users to participate in different games, mint NFTs using the ecosystem tools, or generate rewards by staking their NFTs.

NFT platforms continue to reinvent themselves with the latest innovation and ideas. For instance, NFT platforms are now adopting the decentralized autonomous organization (DAO) model regardless of the purpose they serve. DAO helps them end the bureaucracy and overcome its potential consequences. DAO-powered platforms focus more on users’ interests, distributing the regulatory power among the members based on how many NFTs or the platform’s native tokens they own.

DAO also powers futuristic NFT-based concepts such as Metaverse marketplaces and “play-to-earn” games. As such, DAOs are becoming the cornerstone of next-gen digital infrastructure and the future of decentralized technology. Let’s go deeper to discover more about DAO and its role in regulating NFT platforms.

What are DAOs?

To understand DAO-enabled NFT platforms or the NFT marketplaces, we first need to understand the DAO and its governance. A decentralized autonomous organization (DAO) is an autonomous organization regulated through a set of rules embedded on computer programs, technically known as smart contracts. DAOs are decentralized, meaning they exist and run on a blockchain ecosystem.

Take, for example, a group of people seeking other like-minded people across the world to collaborate and establish an autonomous social organization. This concept may seem challenging to many, but DAO makes it possible. Through DAOs, individuals (who are not familiar with each other) can use the internet as a medium to communicate and organize themselves in a trusted environment, share values, and regulate an organization.

DAOs end organizational hierarchy, automating decisions by allowing everyone to participate, vote on operational decisions, and contribute to the management of DAOs. Depending upon the structure of the project, technology, and modus operandi, enterprises can choose to reinforce DAO from the following major categories:

Operating systems: Standalone platform helping enterprises create and establish their own DAOs

Protocol DAOs: Utilizes voting mechanisms to implement decisions regarding protocol changes

Investment DAOs: Supports pooling and investment operations for different DeFi (decentralized finance) projects

Service DAOs: Regulates talent hunting and acquisition operations for enterprises and individuals

Collector DAOs: Designed to regulate NFT platforms committed to providing fractional and complete NFT ownership

Social DAOs: Supports decentralized platforms for social networking and engagement

Media DAOs: Decentralized news aggregator working in consumers’ interest

Enterprises should further monitor innovations on the DAO’s horizon to determine which DAO model is more suitable for automating their organization.

Evolution of NFT Platforms: Before and After DAOs

NFT Platforms before DAOs

NFTs are implemented on blockchains using smart contracts. Each token minted on the blockchain protocol carries unique information called Metadata. Therefore, NFT platforms or the NFT marketplace cannot be centralized. However, the founders of the blockchain protocol have sovereignty over decisions such as launching features on the blockchain, establishing rules, and unveiling upgrades.

For example, an individual cannot own or control the marketplace built on the Ethereum protocol. Instead, the right to make decisions still belongs to its original creators, who decide which implementations are required to ensure the longevity and prosperity of the network. Users have no role in deciding the protocol’s future, and they cannot vote to support any decision or suggest any changes to the protocol. This lack of user sovereignty makes traditional organizational governance an incompatible solution.

NFT Platforms after DAOs

DAOs bring transparency via a distributed decision-making system. It automates the governance of NFT platforms, allowing users to actively decide the future of the platforms. DAOs further eliminate the barriers to the decision-making process, like who can propose changes to the platform’s governance or who has the power to vote (shareholders and board of directors in traditional companies).

Instead of making stakeholders trust a CEO or manager, DAO strives to distribute the power of controlling the organization to the members running the NFT platform. For instance, if ten members together set up an organization, they can cast a vote and propose changes to the governance.

With numerous people participating and contributing to the success of a DAO, DAO-enabled platforms deliver quick and efficient solutions more easily than those without DAOs. Realizing the potential benefits of autonomous organizations, most organizations have backed DAOs to provide users with the benefits of decentralized governance.

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How can DAO-enabled NFT platforms benefit users?


Ownership benefits

DAO works as a decision-making tool for an NFT platform. While NFT platforms are huge in numbers with different varieties, the popularity of gaming-based NFT platforms continues to rise. In this regard, let’s understand how the involvement of DAO makes a gaming NFT platform more beneficial to the users.

  • With DAOs, users get the right to review policies regarding moderation of content, assets policy, auctions.
  • DAOs own the smart contracts and digital assets (NFTs) to bring autonomy, removing the concept of CEO and leadership from any NFT platform.
  • Users get the opportunity to stake their NFT and the native token in the dApp to generate rewards out of it.
  • Users retain complete control over their NFTs even when these are staked or supplied to the liquidity pool.
  • DAOs enable the community to propose decisions and vote on important aspects of the platforms such as NFT auctions, marketplace decisions, battle launches, modification in contract policies, etc.
  • Users can propose any changes to the underlying governance of the NFT platform via voting, which decide on a range of issues, including-
    • Features upgrade on the NFT platform.
    • Dates and policies for the live auctions.
    • Tokenomics of the platform-burning mechanism and token supply.
    • Addition of new assets like wearables, gaming characters, marketplace, etc.
    • Replacement or addition of members in the security council.

Voting power

DAO-enabled NFT platforms have similar features to regular NFT platforms, but the difference reflects the governance model and the ownership policies. Users in a DAO-enabled platform participate in major decisions through voting in three simple stages:

  • Proposals
  • Votes submitted
  • Result

DAO-enabled NFT platforms utilize members’ votes to issue grants and make changes to the existing rules and policies of the platform. DAOs enable every user to take an active role in decision-making activities and determine policies for the community’s future through transparent and distributed decision-making. This model strives to bring uniformity, welcoming the community members equally to participate in the governance of the NFT platform and deliver solutions through their participation.

Income and rewards

The craze for gaming-based NFT platforms continues to grow because these platforms are adventurous and can generate many rewards and income opportunities for users. DAO helps NFT platform users propose such opportunities as NFT staking. NFT staking helps NFT holders earn passive income by allowing them to unlock their NFTs and stake their NFTs into the liquidity pools, all without transferring the ownership of their NFTs to others (selling them). With time, we will see more interesting ways to monetize assets. NFT staking platforms are mainstream and are already allowing NFT holders to benefit from their monetization practices.

We have gone over the direct benefits that DAO brings to the NFT platform, but DAO-driven capacities within an NFT platform are not limited to these benefits. An NFT platform can use DAO to provide its users with a plethora of other innovative features that will help improve the user experience. For example, ZooDao is a DAO-enabled NFT platform designed to generate passive income for users. This platform has used the DAO model to develop NFT battles and NFT yield farming features.

NFT battles

With the help of a dApp, the NFT platform offers the “NFT Battles” feature to the users. NFT holders stake their assets against the competitors (other NFT owners). Others participating in the battle can stake their NFT tokens supporting their preferred NFT and earn rewards in NFT tokens and digital assets. The battle on the NFT staking platform occurs in five stages:

Stage 1- NFT staking

Stage 2- Voting

Stage 3- NFT pairing

Stage 4- Battle Starts

Stage 5- The result

NFT Yield Farming

Users holding both their NFTs and the native token of the NFT platform can participate in yield farming. For this, they need to pitch their eligible assets and directly stake the assets into the platform’s liquidity pools to provide liquidity to the platform and generate rewards out of it. The rewards are provided in tokens and the limited edition of NFTs. However, not every user staking their NFT is eligible to be rewarded with rare NFTs, and they first need to check the eligibility and then stake their NFTs.

Regulated through DAOs, yield farming is fully transparent and fair. The users can see how their reward is determined and their eligibility for special rewards; no information or process is confined.

How can LeewayHertz help?

At LeewayHertz, we help enterprises adopt DAOs to decentralize their business infrastructure, allowing them to overcome the challenges of the centralized system. Following are the main DAO-focused services we offer:

Smart contract development

Knowing that smart contract is the backbone of DAOs, we build your project-specific contracts, defining the required rules and logic to regulate your organization’s network. Our blockchain developers follow the best smart contract development practices to ensure every contract’s transparency, robustness, and immutability.

DApp development and integration

We design, develop, and integrate a wide variety of dApps to support your DAO. based on project-specific requirements; you can choose to build dApps ranging from voting dApp to payment gateways to peer-to-peer communication dApps for the effective administration of your DAO.

Migration and upgrade

We help your enterprises migrate the existing DAO seamlessly from one blockchain ecosystem to another. We further visualize the aspects of your projects to precisely optimize the smart contract to facilitate better functionalities in terms of security and operation.

Node development

We develop nodes that establish a peer-to-peer connection for your DAO to be running efficiently. You can further use these nodes to regulate voting, validate the associated decisions on DAO, and move ahead with your voluntary activities required to manage an organization.


DAOs are said to be the future of work. As a concept and a technology, DAO can transform the structure of a legacy business by empowering member-owned communities and removing centralized leadership. Identifying the power of DAOs and the core prediction given by industry experts, organizations have been frequently molding their infrastructure corresponding to the DAOs. DAOs can support anything from an NFT marketplace to a crypto trading platform to even a Metaverse project.

If you are looking to build or optimize a DAO-enabled NFT platform, we are happy to partner with you. Please connect with our blockchain developers to discuss more.

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Author’s Bio

Akash Takyar
Akash Takyar
CEO LeewayHertz
Akash Takyar is the founder and CEO of LeewayHertz. With a proven track record of conceptualizing and architecting 100+ user-centric and scalable solutions for startups and enterprises, he brings a deep understanding of both technical and user experience aspects.
Akash's ability to build enterprise-grade technology solutions has garnered the trust of over 30 Fortune 500 companies, including Siemens, 3M, P&G, and Hershey's. Akash is an early adopter of new technology, a passionate technology enthusiast, and an investor in AI and IoT startups.

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