INTRO

2021’s crypto market witnessed an increased interest in blockchain art and so-called Non Fungible Tokens (NFTs). The months of March and April unleashed an "NFT mania" as the demand for blockchain art and user awareness grew exponentially.  Although the hype has abated somewhat, we know that NFTs are here to stay.

Traditionally, the art industry doesn't often allow works of art to be shared or co-owned. There are insufficient well-structured tools for such ventures to be effective. Thanks to blockchain technology, people can organize themselves and jointly pursue goals without knowing each other or trusting a third party. It is becoming easier to create a safe and transparent environment for co-ownership rights for digital artworks. We can now significantly reduce the barrier to acquiring digital goods and democratize access to digital assets as blockchain technology allows us to tokenize virtually everything from physical items to intangible works of art and collectibles. In addition, blockchain enables users to sign tokenized items with a unique piece of code, which allows them to secure ownership rights and protect the virtual item from further replication.

However, only a few people can afford to spend six or seven figures on digital artwork to win a bidding war. This can be fixed with services like NIFTEX and Decentralized Autonomous Organizations (DAOs), which enable multiple parties to come together to purchase high-value NFTs with ease.

In this article, you will learn about NFT DAOs, i.e., DAOs focused on purchasing or managing a portfolio composed primarily of Non Fungible Tokens. First, let me explain what DAO is.

WHAT IS A DAO?

DAOs (Decentralized Autonomous Organization) act according to a pre-defined set of rules, like most organizations. However, unlike centralized organizations, DAOs do not rely on trust to any third party. DAO contracts are immutable and cannot be manipulated or misinterpreted. DAOs create a layer of transparency through which people can collectively team up themselves into groups with a common goal without the need for centralized decision power.

EXAMPLES OF NFT DAOs

pleasrDAO

PleasrDAO is an NFT DAO that was created as a way to jointly collect funds for high-value NFT (Non-Fungible Token) purchases. The total cost and the ownership over the digital asset is shared between PleasrDAO members.

The backstory of the pleasrDAO is that formerly it was built to collectively purchase a Uniswap V3 NFT artwork titled “x*y=k” that was designed by @pplpleasr1 to celebrate the forthcoming update of the most popular DEX - Uniswap. Pplpleasr is a New York-based 3D digital artist and “high-quality meme generator”, according to her Twitter bio. As a result of the sale of the Uniswap V3 non-fungible token (NFT), pplpleasr became the honorary member of PleasrDAO. All funds collected via this purchase were donated to charity.

Since then, PleasrDAO has hit crypto and mainstream headlines with their purchase of the one and only Edward Snowden NFT “Stay Free”. On Apr 16, 2021, the first official Edward Snowden non-fungible token (NFT) was purchased in an auction on the Foundation platform by PleasrDAO. To date, the Edward Snowden NFT remains the highest-selling piece ever sold on the Foundation platform. Funds from these purchases were also donated to charitable causes, precisely to Freedom of the Press Foundation, to promote transparent journalism and decentralization within the media. When asked why PleasrDAO decided to spend 2,224.00 ETH ($6 500 000) to buy Snowden's first NFT token, the answer from Jamis Johnson, the CPO of PleasrDAO, was that pleasrDAO shares common beliefs and values with Snowden.

PleasrDAO is set to continue buying and commissioning NFT artwork but also invests in decentralized finance and runs an incubator to advance its mission. The current goals are to extend the collection, incubate new crypto products and artists, and angel investments in the crypto market.

FlamingoDAO

Flamingo is a DAO whose main activity is researching and using emerging investment opportunities in the field of digital assets on the blockchain to grow DAO treasury. FlamingoDAO is convinced that blockchain collectors are a new wave of merchants and curators. In their opinion, this switch in thinking about digital property ownership will play a significant role in creating unique, currently unknown markets and ways of consumption of digital content.

FlamingoDAO's goal is to gain a strong foothold in the crypto market. Especially in the newly widely considered blockchain art market. FlamingoDAO is very focused on its members (currently limited to accredited investors, as defined under U.S. law) who, after joining DAO, have the opportunity to incorporate their NFT assets into the DAO treasury and thus gain access to a credit line secured by digital assets.

After becoming a DAO member, FlamingoDAO investors are entitled to various benefits. They can display their NFTs in DAO digital galleries; they can safely store them in DAO's vault, fractionalize them or, what has already been mentioned, use them as security (collateral) in other DeFi platforms. Which path either new members go depends only on them, as one of the basic tenets of this DAO is the decentralized and distributed formula where no member has complete and individual control over the future of FlamingoDAO

The most famous FlamingoDAO purchase is Alien CryptoPunk, purchased in January 2021 for a significant sum of 605 ETH (the second largest bid in this auction was 500 ETH). Currently, there are 6930 ETH in the FlamingoDAO vault, so we can expect further big purchases from them.

You can also become an owner of rare CryptoPunks through NIFTEX shard market! Buy shard of Ape CryptoPunk here and the shard of Zombie CryptoPunk here.

JennyMetaverse

JennyMetaverse is a decentralized organization set up and managed on the Unicly platform. Each DAO member has similar rights and may influence the project's further development. JennyDAO is an NFT collection represented by a minted ERC20 token. In addition to representing the user's share in the NFT collection, this ERC20 token is also needed to vote on the future of JennyDAO, e.g., what other works of art should be included in the collection.

Each user, who is not even a DAO member, can purchase one of the works of art from the JennyDAO treasure after obtaining the appropriate number of tokens. What else will the members of JennyDAO decide? They are responsible for the process of adding NFTs to the vault and locking them in smart contracts. The community will also be in charge of estimating the total value of these locked NFTs, creating/adding new NFTs, arbitraging the value of the NFTs and the Jenny token, and evaluating the ongoing bids on the already purchased NFTs. Having shares in JennyDAO is associated with several benefits: each member also gets access to closed Telegram and Discord, additional insight from the NFT market, market news and updates, and, of course, control over how funds from JennyDAO treasury are used.

One of the most important benefits of becoming a JennyDAO member is that after each sale of the NFT from the vault, the premium value obtained between the bid and ask price will be distributed to all DAO members according to their % share in the DAO. Recently the JennyDAO collect $7M from investors to grow its NFT Vault. Many notable supporters put their money to work on NFT market with Jenny, to mention only a few: 0xb1, Moonrock Capital,  Spartan Group, 3Commas.

YGG

Most of the NFT DAOs currently existing on the crypto market concentrate on broadly understood artworks and art forms. However, this is not the only possibility. A completely different niche of the NFT market has been chosen by YGG DAO, which actively invests and manages in-game assets from NFT games.

In March 2021, YGG DAO obtained funding of $1.325M for the development of its concept. The round was led by the digital asset research firm, Delphi Digital, joined by Scalar Capital, BlockTower Capital, and others. YGG intends to use these funds to buy more items in NFT games, purchase plots and areas in these games, and invest in the so-called "virtual world" or "metaverse" economy.

However, the main focus of YGG is the exploration of the "play to earn" concept proposed by Axie Infinity, which allows players from all over the world to generate income just by playing the game and defeating opponents. YGG sees an advantage in NFT in-games over their artworks-mates. YGG Co-Founder and long-time Axie player - Gabby - believes that in-game NFTs have the great advantage of having a specific and easily recognizable utility, where for art, the main goal is to be aesthetically pleasing. As aesthetically pleasing doesn't generate clear and passive yields, it can be less interesting for investors.

In-game items have an intrinsic value as they are the most essential and necessary part of any economy inside games. Every MMORPG player certainly understands that each separate game world is an entirely different economic system. YGG DAO wants to use these economic systems to its advantage. The significant advantage and change in the approach to the game developer <> player relationship is that YGG enables gamers to become investors with the guild purchasing land and tokens in games that they actively participate in. We can see such structures of players for the first time in human history, and it's just the very beginning.

APED DAO

Bored Apes collector Kylo.eth (read the interview with him here) - recently used NIFTEX to create an NFT DAO, which is now a Vault and home to one of the most extensive Bored Apes collections out there. The launch of the APED DAO turned out to be a great success, collecting 70 ETH in just 4 days.

The bundle originally contained 49 items (48 Bored Apes and 1 female CryptoPunk). However, several DAO members decided to subsidize the DAO by sending more NFTs to the smart contract wallet vault. Hence the collection has been enriched with baby CyberKongz, Arabian Camels, Punk's Comic, Bonsais, Crypto Balls, Avastar, and many more. APED DAO has quickly grown its treasury and expanded far beyond the Bored Ape ecosystem. Currently, the DAO is looking for ways to allocate treasury funds into a new NFT project to further develop the collection managed by the members of APED DAO.

The example of APED DAO shows how easy it is to unite internet strangers under one banner to achieve unified goals effectively. APED DAO is governed by its community, using $APED shards (fractions) to enforce decisions. The shards were created with NIFTEX and represent a % share in the fractionalized bundle.

Currently, APED DAO has over 230 members, which already means huge democratization in access to some of the rarest NFTs from the Bored Ape ecosystem. Creating a community is not simple and requires the involvement of many parties and ordinary human diligence. However, structures such as APED DAO clearly greatly benefit coordination, proving their worth to the NFT crypto scene now and even more so in the future.

Check out the Apes and other NFTs in the APED DAO treasury & become a member of $APED DAO here.

The $APED shards are also available to purchase on SushiSwap (DEX) here and UniSwap (DEX) here.

CONCLUSION

If we consider humans to be herd animals, it is obvious that new forms of uniting under the banner of a common goal without relying on third parties or without having to rely on trust in other members of the community will be a frequently chosen form of self-organization. Most communities have more resources than single entities, being able to bring together knowledge, assets and much more. Thanks to blockchain technology, managing such processes in a decentralized manner is now a viable avenue. We speculate that a new wave of use cases for NFT DAOs is quickly heading our way and will lead to even greater exploration of the intersections of DeFi (Decentralized Finance) and NFTs.