# #7 - A Complete Guide to Create a NFT DAO on Solana ![](https://hackmd.io/_uploads/SycpRADrq.png) **Authors:** [@emersonliuuu](https://twitter.com/emersonliuuu), [@ironaddicteddog](https://twitter.com/ironaddicteddog) ***\[Updated at 2022.4.28]*** ## Overview ### DAO (Decentralized Autonomous Organization) ![](https://hackmd.io/_uploads/Syq6nvvSq.png) > Image from [internet](https://www.google.com/url?sa=i\&url=https%3A%2F%2Funwire.pro%2F2022%2F01%2F29%2Fdao-explained%2Ffeature%2F\&psig=AOvVaw0VaigJjMLsCsYtvmlP7Zn_\&ust=1651195222406000\&source=images\&cd=vfe\&ved=0CA0QjhxqFwoTCJi359rLtfcCFQAAAAAdAAAAABA7) Some definition here... > An organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government, in other words they are member-owned communities without centralized leadership. -- [WIKIPIDIA](https://en.wikipedia.org/wiki/Decentralized_autonomous_organization) #### Featrues * anyone who meets the requirement can participate decision making process. * gather people with same goal together without geographic restrictions * governance treasury (can be crytocurrencies or NFTs) through program #### How DAOs work If you own above certain amount of governance token, you are able to create a proposal. But normally people will discuss the topic first in the community for a while instead of creating a proposal directly, this is because people need some time to understand the scope and relative solutions. After a proposal been created, anyone who owns any amount of governance token can join the vote process. Once the voting period ended, user can excecute the program which already define in proposal. #### Example 1: Curve DAO ![](https://hackmd.io/_uploads/Hytmv_wB5.png) ![](https://hackmd.io/_uploads/SJTmv_DH5.png) Curve Finance is a DEX concentrate on stalbe coin swaping which provide low slippage rate. #### Example 2: Mango DAO ![](https://hackmd.io/_uploads/SkBDhjPrc.png) * Proposal example: * Might discuss first: #### Example 3: Serum ![](https://hackmd.io/_uploads/BJYqpowr9.png) * > learn more about DAO [here](https://consensys.net/blog/blockchain-explained/what-is-a-dao-and-how-do-they-work/) ### NFT DAO ![](https://hackmd.io/_uploads/SkkKIFPS5.png) * [MonkeDAO](https://monkedao.io/) NFT as a pass for joining governance process. More NFT you own, more voting prower you have. ### DAO tools * * * [Realms.today](https://realms.today/realms?cluster) (support NFT DAO) * [Squads](https://app.squads.so/) ### Governance structure ![](https://hackmd.io/_uploads/Syii1OFN9.png) 1. when creating a DAO, governance program will create a PDA with your DAO's name in the seed. 2. if there's a program (called programA) going to be governed by DAO, governance program will generate a PDA as update authority of programA. 3. people can deposit their token to DAO and they will have token governanceaccount which allow them to create a proposal or voting. ### Proposal process ![](https://hackmd.io/_uploads/BJNRlOFVq.jpg) > Image from [spl-governance](https://github.com/solana-labs/solana-program-library/blob/master/governance/README.md) 1. **\[ proposal: - ] *****program owner*** create program governance 2. **\[ proposal: draft ] *****proposal owner*** create a proposal * add/remove signatory * Insert/remove transaction * cancel proposal 3. **\[ proposal: signing ] *****signatory*** agree this proposal or not 4. **\[ proposal: voting ] *****voter*** vote "Yes" or "No" to the proposal, every vote will generate a vote record. 5. **\[ proposal: finalizing ] *****user*** can finalize the proposal after voting period * if *Yes* > *No* **\[ proposal: succeeded ]** * else **\[ proposal: defeated ]** 6. **(if succeeded) \[ proposal: exicuting ] *****user*** can exicute proposal transaction after hold up period. 7. **\[ proposal: completed ]** ## Part 1: Setup ### Mint NFTs Before the creation of the DAO, let's mint some dummy NFTs and distribute them to different holders. We will go through [SolMeet #3 note](https://book.solmeet.dev/notes/complete-guide-to-mint-solana-nft) to create and verify these NFTs and collection. Please refer to the note for more details. > Please make sure **proxyman** is up and running with correct config to view the NFT on mainnet-fork in your browser wallet. See [here](https://book.solmeet.dev/notes/complete-guide-to-mint-solana-nft#display-nfts-in-phantom) for more details. ### Setup `governance-ui` We will use a well-structured [front-end UI](https://github.com/solana-labs/governance-ui) maintained by Solana Lab through the entire example. In the following sections, you will interact with the DAO via the UI that is running locally in your machine, with the correct RPC config First, clone and build `governance-ui`: ```bash $ git clone git@github.com:solana-labs/governance-ui.git ... $ cd governance-ui $ yarn ``` Before we start, we have to config the RPC to our [mainnet-fork](https://github.com/DappioWonderland/solana). Replace part of `utils/connection.ts` with the following code snippet: ```typescript // In utils/connection.ts ... // Line 6 { name: 'mainnet', url: process.env.MAINNET_RPC || 'https://rpc-mainnet-fork.epochs.studio', }, ... // Line 30 export function getConnectionContext(cluster: string): ConnectionContext { const ENDPOINT = ENDPOINTS.find((e) => e.name === cluster) || ENDPOINTS[0] const commitment: Commitment = 'processed' return { cluster: ENDPOINT!.name as EndpointTypes, current: new Connection('https://rpc-mainnet-fork.epochs.studio', { commitment, wsEndpoint: 'wss://rpc-mainnet-fork.epochs.studio/ws', }), endpoint: ENDPOINT!.url, } } ``` > You can also use the [explorer](https://explorer.solana.com/?cluster=custom\&customUrl=https%3A%2F%2Frpc-mainnet-fork.epochs.studio) thats points to `https://rpc-mainnet-fork.epochs.studio` to check the RPC status. Finally, Let's run the DApp: ``` $ yarn run dev ``` You should see the DAO list by visiting `http://localhost:3000`: ![](https://hackmd.io/_uploads/SklJvcPHq.png) ## Part 2: Create a NFT DAO ### Create a DAO First, click ***Create DAO*** and select ***I want to create a bespoke DAO***: ![](https://hackmd.io/_uploads/r1I4CiPS5.png) In ***Create a new realm***: * **Name**: Choose your favorite name for the DAO * **Min community tokens to create governance**: Select `1` to aollow users who has single NFT can create governance ![](https://hackmd.io/_uploads/SyWTk2vr9.png) In ***Council Settings***: * **Approval quorum (%)**: Select your desired threshold for approval. Default is 60%. * **Team wallets**: Council member of the DAO. Default is the creator. ![](https://hackmd.io/_uploads/HkD1ZhPHq.png) In ***DAO summary***, confirm and click ***Create DAO***. ![](https://hackmd.io/_uploads/rkuc-2vBq.png) Nice! You should have the DAO ready at this moment. ### Configure NFT Voting Plugin These are 3 instructions to be done in this step: * Create NFT plugin registrar * Create NFT plugin max voter weight * Configure NFT plugin collection #### Create NFT plugin registrar Click ***New Proposal***: ![](https://hackmd.io/_uploads/Sku5X3vHq.png) In ***Add a proposal***: * **Title**: Use your favored name for the title of proposal * **Transaction**: Select ***Create NFT plugin registrar*** * **Governance**: Select the only acccount in the list Then, click ***Add proposal***, you should be able to see this page when the transaction is executed: ![](https://hackmd.io/_uploads/S11tS2wrc.png) Here, we need to perform two extra actions: **Vote** and **Execute** the proposal. First, click ***Vote Yes***, you should be able to see this page when the transaction is executed: ![](https://hackmd.io/_uploads/rk-kPnwS5.png) Here, pay attention to the upper right green state **`Succeeded: Yes`**, this means that this proposal is ready for execution. Proposals will enter **Succeeded** state via satisfying one of the condition: 1. Votes pass the approval threshold when the voting deadline comes 2. 100% votes approve **In this case, condition 2 is satisfied since there is only one vote can approve this proposal.** Secondly, lets execute the proposal by cliking ***Execute***: ![](https://hackmd.io/_uploads/rJKw5hvH9.png) Nice! This means that the first proposal is executed successfully. #### Create NFT plugin max voter weight Next, let's create another proposal: ![](https://hackmd.io/_uploads/BJt6onwS9.png) In **Add a proposal**: * **Title**: Use your favored name for the title of proposal * **Transaction**: Select ***Create NFT plugin max voter weight*** * **Governance**: Select the only acccount in the list Click ***Add proposal*** and then perform **Vote** and **Execute**: ![](https://hackmd.io/_uploads/SJM532wH9.png) #### Configure NFT plugin collection Next, let's create another proposal: ![](https://hackmd.io/_uploads/BkWzahDBq.png) In ***Add a proposal***: * **Title**: Use your favored name for the title of proposal * **Transaction**: Select ***Configure NFT plugin collection*** * **Governance**: Select the only acccount in the list * **Collection Size**: The total collection size of your NFT. *Here we set the size to a smaller number just for the demo purpose* * **Collection Weight**: The weighting of each vote. Default is `1`. * **Collection**: Use the key of the collection of your NFT Click ***Add proposal*** and then perform **Vote** and **Execute**: ![](https://hackmd.io/_uploads/ryw5ChwB9.png) ### Enable NFT Voting Plugin We only have one final config to enable the NFT DAO feature. Click ***Params*** and **Change config** to open the modal: ![](https://hackmd.io/_uploads/r12pJaPr5.png) * In ***Change Realm Config***: * **Community voter weight addin**: Use NFT Voting Plugin Program Id `GnftV5kLjd67tvHpNGyodwWveEKivz3ZWvvE3Z4xi2iw` * **Community max voter weight addin**: Use NFT Voting Plugin Program Id `GnftV5kLjd67tvHpNGyodwWveEKivz3ZWvvE3Z4xi2iw` Click ***Add proposal*** and then perform **Vote** and **Execute**, then refresh the DAO dashboard: ![](https://hackmd.io/_uploads/B14Kepvrc.png) Whoa! Now you should see the NFTs from the configureed collection displaying on the dashboard. Finally, click ***Register*** to use your holding NFTs. ## Part 3: Propose and Vote In this section, we will go through the follwoing operations: * Create treasury for SOL and NFT * Send funds to treasury for SOL and NFT * Propose to transfer funds * Execute the proposal > Be aware of the tx size limit. The proposal will fail if the proposer has more than **3** NFTs. ### Create Treasury Click ***New Treasury Account***: ![](https://hackmd.io/_uploads/By9LDTPH9.png) In ***Create new DAO wallet***: * **Min community tokens to create proposal**: Set to `1` to allow NFT holder to propose Click ***Create***, you can see a new SOL and NFT treasury appear: ![](https://hackmd.io/_uploads/B1_qEADH5.png) ### Send Funds to Treasury #### SOL Treasury Click ***View*** of SOL treasury: ![](https://hackmd.io/_uploads/By44HAPB9.png) Click ***Copy Deposit Address*** to get the address of the treasury. Now, anyone can transfer funds to this address if they wish. #### NFT Treasury Click ***View*** of NFTs: ![](https://hackmd.io/_uploads/Skz-3APSc.png) Next, click ***Deposit NFT*** and then ***Deposit NFT to Treasury account address***: ![](https://hackmd.io/_uploads/rJxKTRvBc.png) Copy the ***Treasury account address*** (the same as the SOL treasury) to get the address of the treasury. Now, anyone can transfer funds to this address if they wish. Let's check the funds once the transfer is done: ![](https://hackmd.io/_uploads/SycpRADrq.png) ### Propose to Transfer Funds Click ***View*** of NFTs and then ***Send NFT***: ![](https://hackmd.io/_uploads/SkEL1yuSq.png) In ***Send NFT***: * **Destination account**: Receiver of NFT Click **Propose**: ![](https://hackmd.io/_uploads/SybRxJ_B5.png) ### Execute the Proposal Finally, let's perform **Vote** and **Execute**: ![](https://hackmd.io/_uploads/BkOLWyurq.png) Here, you can see the NFT locked in the NFT treasury is gone. Let's check to the receiver's wallet: ![](https://hackmd.io/_uploads/rkujZyOr9.png) Whoa! The NFT transfer is executed successfully! ## Reference * * * * * * * * * * *