📝 From the Editorial Team:

Decentralized autonomous organizations (DAOs) have long been one of the most exciting, but also frustrating sectors of crypto.

It's a seductive idea — for the first time ever, crypto empowering entrepreneurs to forgo the rigid, traditional corporate structures of C Corps and LLCs, instead allowing them to launch a new organization onchain in just a single click, for pennies on the dollar.

But as the onchain data illustrates, true product-market fit hasn't entirely panned out. DAOs continue to suffer from low participation rates and usability issues. In fact, last week a report from Coinbase highlighted that often less than 0.1% of governance token holders regularly participate in votes for large protocols. As you might expect, we have a long way to go before finding large-scale adoption of this new technology.

Still, as seen in the projects below, there is still plenty of energy and innovation happening in DAO land to make this dream a reality, especially with new tools that make it easier to participate, vote, and engage with decentralized organizations. For example, Realms, a DAO tooling project on Solana, saw active addresses spike in November.

There are other early signs of product-market fit below. As Spencer would say, with DAOs we already know the ingredients — we’re just looking for the right recipe.

Snapshot | Realms | JokeRace

• The battle of the top Layer 2s (L2s) show that Arbitrum leads in yearly forum activity, with 1497 unique topics discussed vs 833 topics in the Optimism community. This is a significant change from 2022 when the Optimism community dominated discussions. However in the last few months of 2024 the two leading L2s seem to be reaching an equilibrium, showing signs of separate and unique communities. To compare across 30 different communities, see the x23.ai dashboard.

• Among DeFi protocols, Sky (MakerDAO) and Aave have dominated public discussions. Although Sky discussions are now 5 times lower than their peak in June 2022, Aave discussions have grown 2.5 times higher in the same period. Discussions in Compound and Uniswap have been consistently lower than their counterparts.

• When comparing unique topic authors, only Arbitrum (+81%) and Compound (+12%) increased their contributors in 2024. In the same period, Balancer (-44%) and Sky/MakerDAO (-37%) suffered the largest churn, with only Uniswap remaining fairly consistent in number of authors across 2023 and 2024.

Snapshot is a voting platform that's dominating the governance space. Of 817 tracked proposals in October, 707 were settled on Snapshot for a market share of around 86%. November is painting a similar picture. However, the amount of total proposals has roughly halved since the start of the year — Snapshot's dominance has gone down as well, as DAO-specific governance platforms like Nouns and Compound had fairly stagnant proposal numbers.

• Weekly voter count on Snapshot is up by more than 50% in the last 2 weeks in comparison to the recent average of previous weeks. Peaks in voter count, especially in May 2024, were mostly driven by the stgdao (Stargate DAO).

• Snapshot has roughly 96% of all tracked DAOs onboarded. 166 proposals launched in October with around 120 so far in November. This represents a slight downtrend since the start of the year in line with the market wide declining governance stats.

• Realms is a project on Solana which offers treasury management, voting, and more tooling for DAOs. Total value locked (TVL) in Realms has soared to $1.2B in the past year — the value of assets locked in Realms/SPL Governance has quadrupled in the past year alone, showing that Realms is one of the top platforms on Solana in terms of assets hosted. Solana DAOs have been steadily growing and their de facto home on Solana is Realms.

• There has been a significant jump in active addresses on Realms this November. The increase in new wallets on the platform has been especially noteworthy.

• Daily transactions using Realms hit an all-time high of 2.5K on Nov. 9. Transactions have since dropped, but still remain above pre-spike levels.

• JokeRace is a platform for creating and voting on onchain contests. The project has two revenue streams — a submission may be paid in order to enter a contest; a vote may be paid in order to vote for a submission. Since monetization launched in early 2024, JokeRace has held 666 contests and generated $121k in revenue, which is split 50/50 with the protocol and contest creator.

• A core metric for JokeRace is the amount of votes and voters. Last week, there were 360 unique voters, and 493 votes, not as high as the early October peak which had 11K voters and 12K votes, when the L2 contest of ZKsync vs. Movement was held.

• JokeRace's flywheel — Convert voters into creators and retain them.  There's 278 creators, 37 of whom were voters first. Creator retention is low, averaging ~10% in the first month after starting and dropping to less than 10% by the third month, with some cohorts seeing 0% retention. How can creators stick around longer?