Comprehensive Interpretation of DAO Tools in the Solana Ecosystem: Ecosystem, Challenges, and Opportunities
We will discuss and overview the tools in the ecosystem, their shortcomings, and the problems that DAOs need to address.Author: Sitesh Kumar Sahoo
Original Title: Solana DAO tooling: Ecosystem, Challenges and Opportunities
Compiled by: Deep Tide TechFlow
In 2021, DAOs rapidly emerged, and it was widely believed that DAOs would become a massive structure, with every Web3 organization and even Web2 company eventually becoming a DAO. We saw various types of DAOs being established, from social DAOs to DeFi DAOs, investment DAOs to service DAOs.
This brings to mind the "pick and shovel" theory, inspired by the famous gold rush of the mid-19th century, where thousands of hopeful prospectors headed west in hopes of striking it rich. It was a risky bet, as not everyone would succeed, but the best way to profit from the gold was to sell the necessary tools to these potential miners—"picks and shovels."
Similarly, cryptocurrency is the new gold rush, and DAOs are the hottest trend. By the end of 2021, everyone began building the "picks and shovels" for DAOs.
What was the result? In just a few months, we found that "there are more DAO tools than DAOs!" Indeed, we can see many DAO tools on Twitter, yet DAOs still struggle at the most basic management level!
In this in-depth exploration, we will discuss and overview the tools in the Solana ecosystem, their shortcomings, and the issues that DAOs need to address.
The structure of this article is divided into the following sections:
Introduction—Where do DAOs and DAO tools currently stand?
In-depth tool list (what they are, features, etc.).
Challenges and opportunities in the ecosystem (the interesting part).
Conclusion.
Let’s get started.
Solana & DAOs
We see many DAO tools gaining attention in Solana. To better understand them, we can categorize various DAO tools as follows:
Discover DAOs: Finding products for DAOs
DAO Infrastructure: AWS for DAOs
Talent Liquidity: LinkedIn for DAOs
Productivity and Collaboration: G-Suite for DAOs
Payment Focused: Stripe for DAOs
Fund Management: Banks for DAOs
Discover DAOs: DAO Market
While these may not necessarily be classified as DAO tools, they are excellent platforms for discovering DAOs, where contributors can explore different DAOs, much like viewing various products on Product Hunt by category, reviews, etc.
Here are a few of them:
DAOHQ
It allows you to discover over 1,000 DAOs—a one-stop service for finding, investing in, and voting on DAOs.
DAO DAO
(DAO, DAO) is a Web3 social platform that allows you to launch, fund, and trade DAOs, imagine Reddit + Kickstarter + Coinbase.
CREW3
A beginner's guide for contributors, data-driven automation to reward active contributors, and active members within the application.
Truts
Truts enables people to easily discover top DAOs in their field through comments.
Discover DAOs
Find any information about DAOs and discover more new things among the many DAOs listed on the website.
DAO Infrastructure
These tools provide the infrastructure for DAOs to launch tokens that are crucial to their DAO and help them build their native organizations.
Grape
Grape allows you to create, reward, and protect any online community using Solana.
Users gain access based on their wallet balance and the tokens they hold. Grape can integrate with your Discord ID, so you can now enter some DAOs' Discords and gain roles based on the tokens you hold. Data is stored on Solana, making it easy to restart communities using existing people's wallets.
They also secured second place at the Solana hackathon held in May 2021.
Solsanctuary
Provides the tools and resources needed for community-led DAOs to take over and decentralize.
Upside
Upside helps securely launch and manage tokens for Web3 native organizations.
Upside has helped companies like Cere Network, Republic, DappRadar, Chingari, Freshcut create, launch, and manage over 1 billion tokens, distributed to over 700,000 blockchain accounts.
Talent Liquidity
These are not just tools; they are the best way to learn, earn, and build ecosystems.
Here, you can find full-time or part-time opportunities, grants to bring value to any project or idea, and bounties.
Questbook
Questbook provides a decentralized solution for grant management.
In Guestbook, you can run grant and bounty programs for DAOs and foundations.
Questbook also has a track called Openquest, where you can learn programming and building in Web3 using Solana, Ethereum, and Polygon.
Superteam
Superteam is a collaborative organization of creators, developers, and operators experienced in launching and growing tech businesses. SupeteamDAO can help the most promising projects in the Solana ecosystem launch and grow in the third world (India, Southeast Asia, Eastern Europe, and Africa).
By gaining membership in SuperteamDAO, you can choose to win bonuses or tasks (within a certain timeframe) or receive some funding provided by sponsors.
Superteam is known for its talent and amazing projects.
If you are based on Solana or want to enter Web3 full-time, check out superteam.fun and Earn.superteam.fun for job opportunities.
Layer3
Layer3 is a platform that allows anyone to contribute to DAOs. It provides a bounty market where you can earn tokens by completing tasks, regardless of your skills.
Their website lists multiple communities and various tasks as bounties, which people can complete to learn about cryptocurrency and earn crypto.
They have partnered with several projects. They started in June 2021, and so far, users on LAYER3 have conducted over 2 million on-chain transactions, with many starting their Web3 journey.
Productivity and Collaboration
Most DAOs struggle to effectively accomplish tasks. Coordinating work effectively in a decentralized context is challenging and not easy. There must be programs, protocols, and collaboration. These tools help achieve that.
DeWork
A Web3 native Trello with token payments, credentials, and bounties.
It has raised $5 million from Paradigm, Pace, and many investors. Multiple DAOs and bounties are often created on the platform.
SourceCred
SourceCred is a tokenized protocol that allows communities to track and reward projects and community members based on flexible, self-defined parameters.
It is an open-source tool for communities to measure and reward value creation and organize the community.
It helps new contributors easily and seamlessly join DAOs and is easy to manage.
It easily integrates with other tools and platforms of your choice and starts the operation of the DAO.
Dialect
Dialect is backed by well-known investors such as Multicoin Capital, Tiger Global, Jump Crypto, and others.
Dialect is an open-source smart messaging protocol for dynamic, composable dApp notifications and wallet-to-wallet chat.
It provides an alternative way to communicate with DAO members in a more personalized manner outside of tools like Slack and Discord, which may enhance communication among DAO members.
Some of its features include wallet-to-wallet chat, in-dApp notifications, email, and SMS.
It is providing messaging and notifications for some of the largest projects in Solana.
Reputation-Based Tools
Having a value measurement system is crucial when building a community. Especially in DAOs, contributors can be rewarded with currency (through tokens) and abstraction (reputation within the DAO). These tools help you earn rewards based on your on-chain reputation.
Underdog Protocol
It helps people build their on-chain networks by rewarding and recognizing their biggest supporters by issuing their tokens on Solana, which can be thought of as LinkedIn Kudos.
xHashtag
When collaborating with Web3 projects, xHashtag helps them build and grow a reliable community and leverage a large user base for projects, ultimately rewarding them with non-transferable achievement certificates, SoulSwags, for their contributions to tasks and activities.
xHashtag is supported by Titan Ventures, SOLRAZR, KuCoin Labs, ZBS Capital, and more investors and advisors.
Decision-Making and Governance
In the context of DAOs, governance refers to the mechanism for making any type of modification to the protocols held by the DAO. Members of the DAO typically need to hold a specific number of tokens before proposing any suggestions, and these modifications are passed or rejected based on the total votes cast by DAO members.
Tribeca
Tribeca is a protocol for creating, managing, and interacting with DAOs on Solana. It is an open-source governance primitive built and maintained by members of leading protocols on Solana.
It has launched integrations and DAOs for many protocols, including Sabre, Friktion, Port Finance, Arrow, Acumen, and more.
It is largely inspired by Compound and Curve governance.
Their code is unaudited, and they have not been active on Twitter and Discord for some time. Tribeca can integrate with other Anchor-based projects and tool plugins, allowing for greater composability.
Payment-Focused Tools
These tools are generally used for token distribution and attribution as well as payroll.
Streamflow
Streamflow is a token issuance platform that provides teams with the necessary tools to manage their finances and easily allocate value (streaming payments and on-chain payroll).
With a TVL of over $130 million, there are over 30,000 streams and more than 170 tokens. It is backed by well-known investors including Jump Crypto, Solana Ventures, and is used by projects like Port Finance, Hubble Protocol, Jungle Finance, Nosena, and more.
You can also build integrated systems on top of Streamflow.
Zebec
Zebec is a continuous settlement protocol on Solana. Starting with Zebec Payroll, it implements composable transfers of value, and Zebec Safe is a fully customizable multi-signature on Solana, which can be thought of as "Gnosis" on Solana.
Zebec allows employees to seamlessly convert their real-time liquid funds into fiat currency via customized metal debit cards. After being audited by CERTIK, it has become the preferred platform for organizations or DAOs attempting multi-signature fund management and streaming payments.
It is backed by investors such as Solana Ventures, Lightspeed Ventures, Alameda Research, and more. So far, they have collaborated with Katana and Tribeca and have their own native token.
Developers can easily implement Zebec Pay functionality into their projects by using their SDK.
Liquify
Liquify enables easier management of token distribution, compliance, and tracking of attribution plans.
Liquify is audited by trusted companies like Macro, Quantstamp, and Sherlock, and is used by companies like Balancer, Indexcoop, Superare, and Snackclub.
Liquify is supported by investors like Dragonfly, Nascent, OrangeDAO, Robot Ventures, and angel investors like Balaji (former CTO of Coinbase and GP at a16z), Packy McCormick (Not Boring Capital), and Anthony Pompliano (Pomp Investments).
Fund Management
These are typically used for financial management, i.e., managing the treasury of the DAO for storing assets or providing returns from those funds. Financial management is an important component of DAOs as it ensures transparency within the organization. Every member can see and contribute to the direction and diversification of funds within the treasury.
Squads
With Squads, you can securely manage your funds, program upgrades, and tokens with your DAO members.
Over 3,000 multi-signatures have been deployed to date.
Audited by OTTERSEC and BRAMAH SYSTEMS.
Well-loved in the ecosystem, they recently launched a more secure V3.
Their SDK is classic and practical, making it very easy to interact with the Squads program.
Goki
Goki provides an interface for creating, managing, and auditing multi-signature wallets on Solana.
Recently collaborated with Cashmere Wallet, Query Protocol, Atrix Protocol, and TribecaDAO governance.
It is not yet public, but you can join their waitlist on their website.
Castle Finance
Castle Finance provides a safer way for DAOs and their communities to earn returns through its native customizable vaults.
The yield on the USDC vault is about 2.8%, with a TVL of over $300,000.
Additionally, Castle Finance integrates with Cashmere Wallet to provide seamless returns for users and teams.
Supported by Solana Ventures, Nascent, Shima Capital, and many other partners.
Katana
The Katana protocol helps users passively earn the best risk-adjusted yields in the ecosystem by providing a suite of packaged yield products across a range of risks.
Friktion
Friktion provides DeFi-based, risk-adjusted return generation strategies for DAOs, individuals, and traditional institutions through institutional-grade structured products and risk management.
It introduces concepts like Volts and Circuits into the DeFi ecosystem, offering active and passive portfolio management strategies.
Unique.vc
Unique Venture Clubs is a no-code platform that allows people to pool resources, build custom on-chain governance structures, and collectively own assets. It enables you to create or join Web3 investment clubs to purchase and manage assets on-chain.
They are building infrastructure and tools that enable people to pool resources together, eliminating financial, technical, social, and trust barriers.
Currently supported assets are NFTs and fungible tokens, with more assets coming soon.
Audited by ZOKYO, they are supported by investors like Solana Ventures, WW Ventures, MEXC, SVC, and others. Other projects like Grape, Bonfida, Streamflow, Magic Eden, etc., have collaborated with Unique.vc.
Cashmere Wallet
Cashmere Wallet allows teams or DAOs to manage their treasury through multi-signature operations, enabling you to send and receive digital assets directly in your team treasury.
The platform also integrates scheduled payments, cross-Solana ecosystem integrations, and Slack notifications. They also promise a fully functional SDK that may be coming soon.
It is audited by Ottersec and trusted by companies managing funds like Opensea, Million on Mars, Fast Break Labs.
MeanFi
Teams and organizations can create cryptocurrency treasuries, issue attribution contracts to investors, and use real-time cash flow to pay salaries. MeanFi achieves this through its no-code token distribution, cryptocurrency payroll, and multi-signature, along with its DEX with HLA.
With support from a dozen institutions and over 100 treasuries, MeanFi has become another solution for treasury management, payroll operations, and token attribution.
Data
These tools allow you to collect data from on-chain sources. You can analyze them for better insights.
Dune
Dune Analytics is a data platform used by analysts and investors to research specific projects, such as NFTs, DeFi platforms, DAOs, or any blockchain ecosystem.
Anyone can use Dune to query data and create visual charts.
DeepDAO
DeepDAO collects and organizes various quantitative and qualitative data about DAO governance, structure, personnel, and decision-making. It currently offers interactive data dashboards, project descriptions, DAO tool guides, and a Discord channel for governors.
Flip Side Crypto
It lists learning materials through which you can gain and learn various things, as well as data analysis and SQL.
Integrated Tools
Crypto is built on the commitment to open data for anyone to use. This not only makes it very open but also makes it very easy to build on top of it. In addition to the previous categories, there are some tools that primarily provide one-stop solutions for creating, managing, and operating DAOs.
Realms
A fully on-chain product that implements the creation, voting, and financial management of DAOs.
You can invite members and vote on proposals; in addition, it has tools for fund management, identity management, and analytics for these operations.
Realms also manages some large projects in the ecosystem.
Some Noteworthy Tools
Tools that did not make the list but are worth noting.
Parasol Finance
A community-managed IDO platform built on Solana, serving investors and projects.
Celesta Labs
Entry and background management for DAOs. For Causes & DAOs, it helps create social impact through donation tokens, and you will receive Impact NFTs as proof of your donations on-chain.
Challenges and Opportunities
We have seen tools across all categories and what problems they are addressing. But one thing is certain: not all tools can meet all the needs of DAOs, especially on Solana. This also presents us with challenges and opportunities.
Challenge 1: Technical Challenges
1. Cross-Platform Collaboration
If you are using multi-signature tools like Realms or Squads, you should be able to collaborate on documents with platforms like Wordcel.
2. Cross-Chain Collaboration and On-Chain Collaboration
For example, if you have multiple contributors in your DAO but want to publish an article on Wordcel, how do you do that?
Then our solution is to integrate governance or financial management with Wordcel. If you are added as a member there, you should be able to publish on the DAO's publications.
Another approach is collaborative publishing, which allows multiple people to collaborate on any media, and it is on-chain.
Challenge 2: Payments—the Missing Key Piece of the Puzzle
While cryptocurrency inherently addresses payment issues, DAOs face many obstacles in managing and automating payments, often leading to delayed payments. Sometimes, DAOs pay with their native tokens, which can be quite unstable. We have also heard that contributors often find it difficult to rely on cryptocurrency income as a stable source of income. Additionally, many active contributors find it challenging to get DAO projects to pay their expenses, such as SaaS expenditures, travel reimbursements, etc. All of this leads to a poor payment experience for DAOs and contributors.
Potential solutions: To address automation issues, operational efficiency through payment request links, scheduled payments, and expense management tools is crucial. Corporate cards are another solution, where all active contributors of the DAO can have a card that they can use for all their business needs, such as SaaS expenses or conference tickets.
Web2 tools (like Expensify, Gusto, Brex) have not yet been built for their Web3 counterparts, and when these tools are built, it will attract more interest from people. 
Challenge 3: Building a Grant Ecosystem and Platform like Gitcoin on Solana
There are many open-source projects with issues and bugs that can be resolved through bounties or community funding.
Existing bounty systems lead to VC investments being allocated to specific projects, distorting the priorities of the Solana community.
Creating something like Gitcoin Grants is more of a social philosophy issue than a technical one. Most Ethereum projects, such as Uniswap, Aave, and Polygon, regularly participate because they have a strong belief in supporting public goods. Essentially, their views align with those of the Ethereum community.
And until now, we have not seen any movement around public goods on Solana. This is urgent and requires building a better ecosystem simultaneously.
Challenge 4: Legal Structure of DAOs
How does a community achieve legal clarity?
DAOs are similar to many organizations, such as corporations, non-profits, partnerships (including general and limited liability), and cooperatives, but these organizations are regulated and governed by the rules of their respective jurisdictions.
DAOs, however, are purely decentralized, lacking a specific location, and their governance rules do not fit into any existing legal framework. Today, DAOs from around the world struggle with regulatory issues such as taxation on DAO tokens, treasuries, and investments, how to obtain insurance for investments, implementing other policies, etc.
While this is not entirely a tool issue, once any DAO achieves some legal clarity, it will pave the way for a plethora of tools to meet the legal needs of DAOs.
Challenge 5: Human Resource Solutions for DAOs
I know you might be thinking, are we back to Web2? No, there’s more to it.
In addition to the legal challenges of DAOs, there are some complex factors such as recruitment, onboarding, and managing teams.
As DAOs are a new phenomenon, finding and vetting talent suitable for working in a DAO is quite challenging. DAOs without relevant organizations must also find ways to address the legal complexities of connecting with talent when there are no counterparties to sign employment agreements or guarantee that talent will not leak confidential information.
DAOs find it cumbersome to convey institutional knowledge to new members, so much of the business is still handled by veterans of the DAO. Due to the rapid changes in DAOs, these companies struggle to document their internal processes, making it difficult to onboard new members.
After onboarding, the core team of the DAO must determine how to manage personnel, which can be difficult in a flat structure, especially when a group tries to portray itself as highly decentralized.
Conclusion
Tools cannot solve problems for a community without shared goals, intentions, and value systems. While the DAO tools market is still small, this space will continue to evolve. Just as protocols were established first, followed by applications, we believe that tools will be built first, and native organizations of DAO/Web3 will be established with the help of DAO tools.
DAO tools will inherently attract many organizations to join Web3 as they become increasingly efficient, and we are excited to see how the organizational stack of Web3 is built.
