Deep Dive: Solana DAOs & Governance - July 2024

Note: Below is the text-accessible version of this post for visually impaired readers.

DAOs are achieving meaningful traction on Solana. Most significant token-issuing protocols this cycle have established a DAO.

Community governance works on Solana. As a recent example, Jupiter used DAO voting to select deBridge ($DBR) as the next token to launch through their LFG launchpad. $JUP stakers participated in the DAO proposal, where deBridge secured a decisive victory with a 59% share of tokens voted.

Almost all Solana DAOs leverage the Realms and MetaDAO protocols.

Realms: Users can create two types of DAOs -

1. NFT Community DAO where governance power is granted to NFT holders
2. Community Token DAO where governance power is granted to token holders

MetaDAO: Enables users to create DAOs that utilize a futarchy-based governance system, where decisions are made using prediction markets

Combined, these two protocols have produced: 3,014 DAOs, 16,345 proposals, and 20,362 users.

Some of the most notable Solana protocols created DAOs through Realms. Drift uniquely used both Realms for voting on council members and MetaDAO for developer grants. Jupiter and Sanctum opted for their own platform. And Wormhole launched with Tally, an EVM-based protocol.

Part I: Realms

DAO formation activity on Realms has jumped this year. As Solana ecosystem activity has risen in 2024, with new teams launching tokens, DAO activity has also followed suit. Realms' average monthly creation rate increased to 40 in 2024 from 25 in 2023.

Solana is community-driven. Proposals are voted on by DAO participants to make collective decisions. The recent surge in proposals highlights more community-driven developments in the ecosystem. 72% of DAOs created two or more proposals, signaling healthy levels of activity.

BonkDAO drove governance participation on Realms to an ATH. With 97% of Realms users voting in a single BonkDAO proposal, new and active voter participation surged to an ATH in July.

Governance through DAOs is a reality today. Bonk used Realms to vote on a burning mechanism affecting $BONK tokens earned through BonkBot fees. Any wallet holding $BONK could participate and vote in this proposal, with "Yes" winning nearly all of the votes.

Part II: MetaDAO

MetaDAO has gained momentum in recent months.

Impressively, 57% of DAOs actively created proposals. Of the 14 DAOs created on the platform, 8 have already submitted proposals, reflecting strong product engagement.

Monthly proposals through MetaDAO reached an ATH. Most DAOs have created 3+ proposals each, highlighting growth not just in the number of DAOs, but also activity by each DAO individually.

MetaDAO's voter counts have continued to show consistent activity.

MetaDAO is different than Realms in catering to economic-weighted value in governance. Forcing voters to put further 'skin in the game', MetaDAO uses a prediction market-driven system for voting. For a platform as young as MetaDAO, the average number of voters and proposers is impressive, reflecting strong user participation in market-based governance.