If you’re intimidated by the high fees and endless gas wars on Ethereum, Polygon may be a more affordable choice for those new to web3 to dip their toes into a DAO.
In this blog post, we cover some basic information regarding DAOs on Polygon, and how you can get started by contributing to one.
Note: Always do your own research before proceeding. This is not financial or investment advice.
Most DAOs are currently operating on the Ethereum blockchain. However, the creation of Ethereum-based DAOs, NFTs, and other smart-contract based projects are currently outpacing the speed at which the underlying infrastructure can handle, causing network congestion and higher gas fees.
As a result, running a DAO is getting increasingly more expensive—members voting on governance proposals or participating in ecosystem reward initiatives such as staking must be prepared to cover any gas costs associated with such actions. This presents a key obstacle for many who wish to participate in DAO activities but are barred by such costs.
As a “Layer 2” scaling solution, Polygon aims to expand the capabilities of Ethereum by allowing it to handle a larger number of transactions, allowing developers to build user-friendly dApps with low transaction fees. L2s do this by processing transactions off the Ethereum mainnet while maintaining similar security and decentralization measures as the mainnet.
While management, voting, and governance proposals on Ethereum may be prohibitively expensive for those using the mainnet, they are much cheaper on Polygon. An average DAO on Ethereum may cost over $500 to deploy, whereas deploying a DAO on Polygon might only cost a few cents!
DAOs on Polygon are still relatively unexplored compared to their Ethereum counterparts. It was only in August of 2021 that Polygon announced that it would be forming a DAO focusing specifically on decentralized finance (DeFi), but as L2s begin to reach wider adoption, so will L2 DAOs.
Here are a few DAOs currently deployed on Polygon:
AavegotchiDAO | The intersection of DeFi and NFTs
What: Aavegotchi is an open-source crypto collectibles game enabled by DeFi and powered by AAVE, a non-custodial liquidity protocol for earning interest on deposits and borrowing assets. It also has its own DAO. In the Aavegotchi ecosystem, players can participate in mini-games, governance, meetups, and more.
Why: Last year, Aavegotchi announced that they were choosing $MATIC, Polygon’s native currency, to power their NFT ecosystem. This integration allows users to perform in-game actions like transferring NFTs and equipping Aavegotchi wearables for little to no gas costs.
Who: Aavegotchi is governed by the AavegotchiDAO, which manages its funds via the $GHST token distribution. Other than purchasing in-game assets, Players can stake $GHST and hold $GHST to vote on governance proposals as well.
Token: $GHST
PhoenixDAO | Digital identity-based protocols and products on Polygon
What: PhoenixDAO is a decentralized, community-led, and open-source project that is aiming to build its own DeFi enabled ecosystem. Their current protocols include Phoenix Identity (powered by ERC-1484), a blockchain-based two-factor authentication (2fa) protocol built to verify DeFi app logins and approve transactions, and Phoenix Payments, which facilitate payments without a 3rd party escrow service.
Why: PhoenixDAO aims to become fully decentralized ecosystem and is planning to launch an identity-powered dApp store and token staking system.
Who: 30% of PhoenixDAO’s toke supply is allocated to supporting the DAO ecosystem and distributes rewards for those participating (and governing) within it. According to their whitepaper, rewards are distributed similarly to Gitcoin’s Ethereum grant system. DAO members can vote by staking 1,000 $PHNX and make proposals by holding 10,000 $PHNX.
Token: $PHNX
KlimaDAO | Fighting climate change by generating demand for carbon offsets
We covered KlimaDAO in our previous blog post. KlimaDAO is fully operating on the Polygon network as a testament to their eco-friendly mission!
If you’re interested in contributing to a DAO or joining a DAO, then we’ve got amazing news for you: Layer3 just launched on Polygon! As part of our integration with the Polygon network, all Polygon DAOs can connect their wallets to L3 and reward users or contributors with Polygon tokens. We’ll also be rolling out exciting new features enabled by Polygon, such as instant rewards and achievement NFTs for using Layer3 👀
If you want to create your own DAO, we’re fans of Aragon Client, an open-source DAO management project that allows any user to deploy or manage a DAO. Aragon recently launched on Polygon in September 2021, and currently works with over 1800 DAOs building web3 communities and organizations, including Aave, Curve, and Decentraland.
Finally, don’t forget to switch your decentralized wallet to the Polygon mainnet in order to purchase tokens or fund transactions for DAOs operating on Polygon. Every wallet is different, but you’ll need to fund your wallet with at least $1-2 USD worth of $MATIC tokens (Polygon’s native token) to cover network transaction fees (crazy low compared to Ethereum, we know).
You can do this by either 1) buying $MATIC on a centralized exchange like Coinbase or FTX, transferring to your wallet, then bridging directly to Polygon, or 2) by buying $MATIC on a decentralized exchange like Uniswap or Zapper, then bridging directly to Polygon.
Remember: you must bridge your $MATIC in order to avoid expensive transaction fees on the Ethereum mainnet! You can learn more about the bridging process here.
Once you have some $MATIC on Polygon, you should be ready to go.
Thanks for reading! Interested in DAOs? Check out Layer3’s links below:
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by Sarah at Layer3
