Year in Review: DAO Trends of 2024

Decentralised Autonomous Organisations (DAOs) have come up to be a compelling alternative to traditional organisational structures, with their promise of decentralisation, transparency, and community-driven Web3 governance.

In 2024, the DAO landscape witnessed growth and a multitude of changes. From emerging protocols to the rise of non-for-profit DAOs, innovation is rife. The increasing tokenisation of real-world assets is also blurring the lines between physical and digital realms, while the explosion of artificial intelligence (AI) is automating tasks and improving decision-making for DAOs.  

Let's now look at the top trends that stuck on to DAOs this year.

1. Emerging Protocols

A prime example of a trending protocol is ERC-1155, a multi-token standard that allows for the creation of both fungible and non-fungible tokens within a single contract. This is in contrast to previous standards like ERC-20 (fungible) and ERC-721 (non-fungible), which require separate contracts.

ERC-1155 became increasingly popular with DAOs as it supports a great variety of token creation, such as governance tokens, membership tokens, and utility tokens, all the while reducing gas costs and storage requirements.

In addition to ERC-1155, other emerging protocols getting DAOs sitting up include DAO-specific chains and inter-DAO communication protocols.

2. AI DAOs Are the New Norm

With AI blockchains and AI crypto coins dominating the Web3 narrative in 2024, it is only natural that AI seeps into the world of DAOs. AI is playing a pivotal role in easing DAO operations, enhancing Web3 AI governance through predictive analytics and automated decision-making. This integration reduces the time spent on discussions and debates, enabling data-driven decisions that can significantly improve operational efficiency.

Several DAOs are already deep in the AI integration. For example, TMRWDAO uses AI to automate governance tasks and provide personalised recommendations to users of dApps running on its infrastructure, such as Votigram.

In other unique examples, ai16z, a VC-focused AI agent, as well as aelf's brand new aevatar Intelligence, offer users the experience of collective formations through customised AI agents.

The emergence of intelligent DAOs that leverage AI for governance and operational tasks is expected to grow in prominence.

3. Focus Shift Towards More Sophisticated Governance Models

2024 saw a notable shift towards more sophisticated and diverse governance models to keep up with growing treasuries and complexities of DAOs.

Mechanisms like delegated voting (delegate voting rights to specialists), quadratic voting (prevent concentrated whale power), and conviction voting (voting power is proportionate to token lock-up period) have been increasingly commonplace practices to promote fairer decision-making.

Many DAOs are also adopting sub-DAOs or multi-tiered governance structures to break down complex decision-making processes into smaller, more manageable units.

4. DeFi Still the Most Dominant DAO Vertical

Decentralised finance (DeFi) continues to be a leading use case for DAOs in 2024. According to data insights on DAOBase, DeFi-focused DAOs dominate the top slots by market capitalisation, as well as leaderboards on governance, treasury value, and community strength. The top five DAOs ranked by market capitalisation are Uniswap, Aave, Arbitrum, MakerDAO, and Curve DAO.

The trend is mirrored when examining DAOs based on Web3 governance activity within the past year. The top 10 is dominated by DeFi-related DAO projects, including Convex Finance, CLever, AladdinDAO, Curve, Concentrator, Index Coop, and Aura Finance.

5. DAOs Set Sights Beyond Ethereum

2024 witnessed a significant rise in the popularity of multi-chain DAOs. These DAOs are not limited to a single blockchain; instead, they play on the strengths of various chains to optimise their operations and reach a wider audience.

A look at DAOBase's leaderboards reveals a diverse range of blockchain networks hosting prominent DAOs. This suggests a potential power shift away from Ethereum — a long dominant chain — as developers and communities explore alternative chains with lower transaction fees, faster speeds, and unique traits.

Some of such alternative chains include:

• Base: This layer 2 solution on Ethereum hosts DAOs like Synthetix and Compound, providing a more efficient environment for DeFi applications
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• BNB Chain: Known for its high transaction throughput and low fees, BNB Chain supports DAOs such as PancakeSwap and Venus Protocol
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• Polygon: Home to DAOs like QuickSwap and Aavegotchi, Polygon offers scalability and lower fees compared to Ethereum
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• Solana: With its fast transaction speeds and innovative consensus mechanism, Solana attracts DAOs like Serum and Raydium

6. Tokenisation of Real-World Assets

DAOs have been opening up a plethora of opportunities for themselves by increasingly tokenising real-world assets like such as real estate, gold, intellectual property (IP), and more. This means that such digital and physical forms of investments can be traded on the market in the form of tokens.

This trend is gaining traction as businesses recognise the potential of blockchain and AI to facilitate ownership and investment in these assets; advantages such as fractional ownership, unlocked liquidity, and automated processes have been particularly attractive to DAOs seeking the next phase of growth.

7. Growth of Non-Profit DAOs

As seen in a previous point, the DAO landscape is largely dominated by DeFi and for-profit ventures. But 2024 also saw a gradual yet noteworthy rise in non-profit DAOs that focus on transparency and accountability in charitable activities.

These organisations allow donors to track their contributions directly, enhancing trust and engagement within the community. This trend reflects a broader movement towards decentralised governance models in sectors traditionally dominated by centralised entities.

However, such DAOs face significant hurdles; donations and grants tend to be less predictable than revenue generated from commercial activities, and building sustainable models for community engagement and Web3 governance is made trickier, given the nature of social causes.

A few philanthropic DAOs that are on the mission to drive positive change in the space include Giveth, LexDAO, and VitaDAO.

8. DAO-as-a-Service (DaaS)

The concept of DAO-as-a-Service is emerging, providing tools and infrastructure for organisations to easily create and manage their own DAOs without requiring extensive technical expertise. Users can create and manage their DAO using drag-and-drop interfaces, pre-built templates, and a suite of AI tools, while DaaS platforms handle the technical complexities of smart contract deployment.

This democratisation of DAO creation could lead to an increase in the number of active DAOs and broaden participation across various sectors.

Conclusion

Several key takeaways emerge from the trends we've explored. The rise of DaaS is democratising access to DAO creation, while the integration of AI is streamlining governance processes, improving decision-making, and enhancing security. Tokenisation is also a big trend among DAOs to manage and invest in real-world assets.

With the growing prominence of AI agents, the AI conversation on the DAO scene is sure to continue well into 2025. We look forward to see what the continued evolution of DAOs brings us in the coming year, as we give back to you, the community, through new and improved governance and voting experiences.

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*Disclaimer: The information provided on this blog does not constitute investment advice, financial advice, trading advice, or any other form of professional advice. TMRWDAO makes no guarantees or warranties about the accuracy, completeness, or timeliness of the information on this blog. You should not make any investment decisions based solely on the information provided on this blog. You should always consult a qualified financial or legal advisor before making investment decisions.

About Tomorrow DAO

Tomorrow DAO (TMRWDAO) is an advanced decentralised governance platform built on the aelf blockchain, a high-performance Layer 1 network. Launched in 2024, TMRWDAO leverages cutting-edge AI technologies and intuitive no-code interfaces to empower communities in establishing and managing decentralised autonomous organisations (DAOs) with unparalleled efficiency. Committed to revolutionising governance, TMRWDAO stands at the forefront of the movement towards a more transparent, inclusive, and democratically governed digital future.

For more information about Tomorrow DAO, please visit: https://tmrwdao.com

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