Summary: A practical, non-technical playbook for launching a DAO the right way in 2025—covering legal wrappers (Utah LLD, Wyoming DAO LLC/DUNA, Marshall Islands DAO LLC), governance stacks (Safe + Snapshot, OZ Governor + Zodiac), shielded voting, identity/Sybil resistance, treasury ops, security monitors, and funding programs—with concrete parameters, tools, and real-world examples.

How to DAO: A Non-Technical Guide for Communities and Creators

Decision-makers tell us the hardest part of “going DAO” isn’t code—it’s sequencing: what to legalize, which stack to deploy, how to guard funds, and when to decentralize. This guide gives you a concrete, 90‑day plan and the latest best practices that leading DAOs actually use in 2025.

1) Should you even form a DAO? A blunt go/no‑go

Use a DAO if at least two are true:

You need ongoing, transparent capital allocation (grants, incentives) with community oversight.
Power must outlive any single company/team (protocols, standards, open-source networks).
Your contributors expect real say (delegation, elections, budget control) and exit rights.

Do not start with a DAO if what you need is a Delaware C‑Corp for sales, payroll, and cap table discipline. Start centralized, ship, and plan a progressive decentralization path with milestones (e.g., budgets, councils, or parameters that migrate on-chain after security thresholds are met).

2) Pick a legal wrapper that matches your risk profile (2025 reality)

You don’t need a law degree—use this decision tree to narrow options:

You want a US domestic entity with native recognition of a DAO form:
- Utah LLD (Limited Liability DAO): standalone legal entity (not an LLC variant), effective Jan 1, 2024. Provides limited liability tied to on‑chain contributions; names must include “LLD/LD/DAO” variants; includes quality‑assurance and security‑review concepts introduced in 2024 updates. Consider if you want US footprint, anonymity redactions in bylaws, and tailored tax treatment. (commerce.utah.gov)
You want a US LLC with DAO supplement or a nonprofit DAO form:
- Wyoming DAO LLC: LLC with a “DAO supplement.” Requires DAO/LAO/DAO LLC in name, smart‑contract identifier filing, and conspicuous notice of modified fiduciary duties; simple to form, requires registered agent; works well for token‑holder DAOs starting as LLCs. (law.justia.com)
- Wyoming DUNA (Decentralized Unincorporated Nonprofit Association): nonprofit framework for DAOs ≥100 members; live since July 1, 2024—useful for open‑source/public‑goods DAOs avoiding for‑profit entanglements. (blockworks.co)
You want an offshore, crypto‑specific LLC with series/sub‑DAO support:
- Marshall Islands DAO LLC: first national DAO LLC regime (2022) with 2023 amendments: faster registration (≤30 days), Series DAO LLCs for sub‑DAOs, explicit treatment that most non‑economic governance tokens are not securities, plus clarity that DAOs aren’t liable for downstream open‑source misuse. Registration is typically facilitated by MIDAO as sole registered agent. Some BOI/KYC requirements exist for significant controllers; for‑profit DAO LLCs face 3% gross revenue tax. (coindesk.com)

Compliance heads‑up (US): the federal Corporate Transparency Act (beneficial ownership info) has been in flux in 2025 due to litigation and agency updates; check your entity’s BOI status at formation (and changes within 30 days). Wyoming’s Secretary of State maintains current CTA guidance—use it as your reference even if you don’t incorporate there. (sos.wyo.gov)

3) Choose your governance stack by stage (what works in practice)

Think in three stages. Stage 0 and 1 can be non-technical to operate, but you’ll make technical choices that pay off later.

Stage 0: Multisig + Off‑chain voting (weeks 1–2)

Treasury: Safe (formerly Gnosis Safe) multisig on your primary chain.
- Why: best‑in‑class smart account infra, rich module ecosystem, widespread audits, and tooling. Recent Messari data shows 41.6M+ Safe smart accounts and >$100B quarterly transaction volumes in late 2024/early 2025. (messari.io)
Voting: Snapshot (gasless) with shielded voting enabled via Shutter to reduce social pressure and bribery; decrypt after vote close.
- Admin flips a switch in Snapshot to enable “Shielded voting.” Snapshot supports multiple voting types (single, weighted, ranked, etc.). Shutter’s shielded voting has been adopted by hundreds of DAOs and is evolving toward permanent privacy. (snapshot.mirror.xyz)
Execution bridge: SafeSnap (Zodiac Reality module) to execute off‑chain votes on-chain via Reality.eth; optionally set Kleros as arbitrator for disputed outcomes.
- This lets any Snapshot‑approved proposal execute against your Safe after oracle confirmation and challenge windows. (zodiac.wiki)
Dispute/appeals: Kleros arbitration on top of Reality.eth; available as a Safe/Zodiac module. (docs.kleros.io)

Parameters to set on day 1:

Safe signers: 5–9 signers; threshold 3–5. Add a timelocked “pause guardian” Safe to receive emergency powers (see Section 5).
Snapshot strategies: governance token with delegation if applicable; require Proof‑of‑Humanity signal (see Section 4) for grant votes; enable shielded voting for sensitive decisions.

Stage 1: Hybrid on‑chain governance (weeks 3–6)

Graduate to on‑chain proposals with OpenZeppelin Governor once you need automatic, composable execution and richer protections:

Contracts: OpenZeppelin Governor + TimelockController + ERC20Votes/ERC721Votes, optionally via the Zodiac Governor Module so your Safe becomes the “avatar.” (docs.openzeppelin.com)
Extensions to enable:
- GovernorSettings (change periods/thresholds by governance)
- PreventLateQuorum (extends voting if quorum is reached late)
- TimelockControl (queue + execution delay) (docs.openzeppelin.com)
Recommended starting parameters (tune in Tally later):
- Proposal threshold: 0–1% of circulating votes; quorum: 2–5% votes; voting delay: 1 day; voting period: 5–7 days; timelock delay: 24–72 hours. Tally provides practical guidance and UI compatibility notes. (docs.tally.xyz)
Frontends: Tally (supports OZ Governor, gasless delegation, partial delegation, optimistic governance, and security‑council elections). (docs.tally.xyz)

Example: zkSync’s 2024 governance uses OpenZeppelin Governor with custom extensions (Guardian Veto, fractional counting; fixed‑quorum that can be reset by proposal)—illustrating modularity you can emulate. (openzeppelin.com)

Stage 2: Specialized councils and elections (months 2–6)

Add a Security Council (multisig with upgrade powers gated by elections), à la Arbitrum DAO (biannual elections with decaying voting windows). Tally provides election tooling and docs you can adapt. (docs.tally.xyz)
Bicameral checks: study Optimism’s Token House (token‑weighted) vs Citizens’ House (1‑person‑1‑vote, with veto over protocol upgrades) if you need non‑plutocratic counterweights. (community.optimism.io)

4) Identity, reputation, and Sybil resistance (without doxxing everyone)

You’ll need practical defenses against vote manipulation, grant farming, and bot signups:

Human Passport (formerly Gitcoin Passport) for Sybil resistance, now part of the human.tech suite. It powers real‑time wallet screening (model‑based detection) and privacy‑preserving stamps; used across 120+ projects and major grant rounds. Integrate for airdrops, grants, or governance eligibility. (passport.human.tech)
EAS (Ethereum Attestation Service) for portable, on‑/off‑chain attestations about anything (roles, contributions, KYC attestations). You can rely on a neutral base layer and even reference canonical contract addresses when needed (e.g., mainnet EAS 0xA1207F3B…, SchemaRegistry 0xA7b3929…). (attest.org)
Role‑based permissions with non‑transferable credentials: Hats Protocol issues ERC‑1155‑like non‑transferable “hats” for roles; hats can control smart accounts (ERC‑6551) to hold permissions and budgets at the role level rather than the person. This reduces churn risk when contributors rotate. (github.com)

Tip: combine Human Passport gating for broad votes (to combat Sybils) with EAS/Hats attestations for contributor‑level permissions and payments.

5) Treasury ops and security: treat your DAO like a fintech

Smart account: Safe. Use two layers:
- Treasury Safe (core assets, high threshold, timelock).
- Operations Safe (monthly budget, lower threshold, spending limits).
- Note: a 2025 incident exploited Safe’s web interface (not contracts) to target a centralized custodian—reinforce signer opsec and verify transaction details out‑of‑band. Messari’s Q1’25 report documents scale and lessons. (messari.io)
Monitoring and incident response:
- Forta Attack Detector: early warnings across stages (funding → prep → exploit → laundering). Protocols have received detections minutes before exploits—time you can wire to pause guardians. (docs.forta.network)
- OpenZeppelin Defender (sunsetting July 1, 2026): if you rely on Defender Monitors/Relayers, plan migration to OZ’s open‑source Relayer/Monitor in 2025–26. Build “pause on alert” automations that a guardian multisig can later unpause. (blog.openzeppelin.com)
Circuit breakers and guardians:
- Add veto/guardian roles (e.g., GuardianVeto) with narrow, time‑boxed controls; use PreventLateQuorum and timelocks to foil last‑minute swings and give users exit time. (openzeppelin.com)
Off‑chain execution with challenge: SafeSnap (Reality.eth) + Kleros arbitrator adds social‑legal recourse for contentious off‑chain votes. (zodiac.wiki)

Real incidents to learn from:

Beanstalk (April 17, 2022): governance capture via flash loan; moved to Snapshot + 5‑of‑9 multisig post‑mortem. Use proposal thresholds, timelocks, and flash‑loan‑resistant vote snapshots. (docs.bean.money)
Tornado Cash (May 2023): malicious proposal that minted voting power; underscores the need for formal proposal review, compatibility checks, and veto/guardian layers. (theblock.co)

6) Funding your community: grants that actually drive outcomes

Three proven models:

Quadratic/stacked grants (historically Gitcoin—transition note): Gitcoin ran rounds on Allo v2 in 2024, but announced in April 2025 it is sunsetting Grants Stack/Allo in favor of a narrower focus; if you rely on Grants Stack, plan alternatives or self‑hosting. Keep using Human Passport for Sybil defense. (support.gitcoin.co)
Retroactive public goods funding (Optimism): Retro Funding Round 4 (June–July 2024) allocated 20M OP across multiple rounds in 2024. Strong eligibility criteria and quantitative metrics reduced spam; plan for KYC if you receive OP grants. (community.optimism.io)
Ecosystem incentives (Arbitrum): STIP expanded to 71.4M ARB in 2023–24 to fund 56 projects; LTIPP followed in 2024 for longer‑term incentives. Use these as templates: clear reporting, dashboards, and sunset clauses. (cointelegraph.com)

Design tips:

Publish criteria (impact metrics, eligibility) and decision owners (council, delegates).
Require Sybil resistance (Human Passport) and on‑chain attestations (EAS) with per‑milestone payouts.
Run optimistic micro‑grants for maintenance proposals; let a veto governor cancel within a challenge window (Tally’s optimistic governance pattern). (docs.tally.xyz)

7) Token, vote, and exit mechanics you should consider

Delegation programs with incentives: Tally’s Delegate Reputation Score (DRS) shows how Arbitrum and Obol pay delegates for quality participation (forum rationale + voting) and improved quorum time; budget caps and square‑root payouts mitigate plutocracy. (docs.tally.xyz)
Privacy for voters: always enable shielded voting for sensitive decisions; adoption and retention data suggests fewer social‑pressure artifacts and healthier participation. (shutternetwork.discourse.group)
Forks / rage‑quit: Nouns DAO’s 2024 fork saw >50% holders exit with ~16,757 ETH—plan exit valves (sub‑DAOs, series LLCs, or forkable treasuries) to avoid governance hostage situations. Marshall Islands’ Series DAO LLC formalizes sub‑DAO liability separation. (rootdata.com)

8) Example architectures (copy/paste these)

A) Grants DAO (ecosystem/community)

Legal: Wyoming DUNA (nonprofit) or Marshall Islands NPO DAO LLC.
Tech: Safe + Snapshot (shielded); SafeSnap + Kleros; Human Passport gating; EAS attestations for milestones.
Process:
- Rounds: 8–12 weeks; milestones in EAS; funds streamed from Operations Safe.
- Metrics: new active addresses, retained users, cost per user, audited proof of delivery.
Risk: fraud → require Sybil screening at application and at payout; challenge window via Reality/Kleros. (docs.kleros.io)

B) Protocol DAO (DeFi/L2/L3)

Legal: Utah LLD or Wyoming DAO LLC; consider a Foundation or DUNA for public‑goods components.
Tech: OZ Governor + Timelock + ERC20Votes; PreventLateQuorum; Guardian Veto; Security Council multisig elections via Tally; Forta monitors trigger “pause” proposals; Safe treasury split (core vs ops).
Parameters: threshold 0.5–1%; quorum 3–5%; voting 5–7 days; timelock 48h; emergency pause via guardian with 7‑day sunsetting. (docs.openzeppelin.com)

C) Consortium/Creator DAO (revenue‑sharing, IP, memberships)

Legal: Marshall Islands DAO LLC (for‑profit) with Series sub‑DAOs per product line.
Tech: Safe + Snapshot; Hats Protocol roles for editors/finance; EAS badges for contributors; shielded votes for grants, public votes for brand.
Payments: use Operations Safe with monthly allowances and role‑gated spending; attest payouts with EAS for auditability. (coindesk.com)

9) Security checklist (non‑negotiable)

Keys: hardware wallets; require signer policy with out‑of‑band verification; rotate signers quarterly.
Monitors: Forta Attack Detector; alert routes to PagerDuty/Slack; test playbooks monthly. (docs.forta.network)
Automations: set “pause on alert” flows; plan migration off OpenZeppelin Defender before July 1, 2026. (blog.openzeppelin.com)
Governance hardening:
- Quorum that scales with supply (VotesQuorumFraction), late‑quorum extension, proposal review period.
- Reality/Kleros challenge period for off‑chain votes; strict proposal templates.
Incident drills: simulate a malicious upgrade proposal and a treasury drain attempt.

10) 90‑day launch plan (what to do, week by week)

Weeks 1–2
- Choose wrapper (Utah LLD, WY DAO LLC/DUNA, or RMI DAO LLC); appoint registered agent; file name with required suffix (LLD/DAO LLC). Map BOI/CTA obligations. (law.justia.com)
- Deploy Safe (Treasury + Ops); enable modules you’ll need later (Zodiac Reality, Delay).
- Stand up Snapshot with shielded voting; pick voting type per decision class. (docs.snapshot.box)
Weeks 3–6
- Integrate SafeSnap (Reality) + Kleros; publish governance handbook (proposal templates, thresholds, challenge windows). (zodiac.wiki)
- Set up Human Passport gating for grant votes and program signups; add EAS schemas for milestones. (passport.human.tech)
- Add Forta monitors; run a red‑team tabletop (“what if a last‑minute whale swings quorum?”). (docs.forta.network)
Weeks 7–10
- Migrate to OZ Governor + Timelock via Zodiac Governor Module; publish parameters; list on Tally. (zodiac.wiki)
- Launch Delegate Program: publish scoring (DRS‑style), budget, and reporting dashboards. (docs.tally.xyz)
Weeks 11–13
- Run your first grant/incentive round or retro round; require EAS‑attested deliverables and Human Passport checks; shielded voting for awards; Reality/Kleros challenge window. (community.optimism.io)
- Draft Security Council charter and election cadence (if protocol‑critical); rehearse emergency upgrade flow. (docs.tally.xyz)

11) Benchmarks and KPIs (what “healthy” looks like)

Governance: 25–40% proposal turnout (adjusted for delegation), quorum achieved <48h median, <5% veto/cancel rate post‑challenge.
Treasury: 6–12 months runway in low‑risk stables/LSTs; ops wallet ≤8 weeks burn; dual‑control for swaps >$50k.
Security: mean‑time‑to‑pause <10 minutes from Forta “exploitation” alert; quarterly signer rotation; zero unsigned emergency transactions. (forta.org)

12) Common pitfalls to avoid

“DAO first, product later.” Ship value first; decentralize what matters, when it matters.
Single‑step decentralization. Move from Snapshot + Safe to OZ Governor in phases with clear exit ramps.
Ignoring identity. Without Sybil resistance and attestations, grants and votes skew.
No challenge windows. Use Reality/Kleros so off‑chain votes can be contested before funds move. (zodiac.wiki)
No migration plan for ops tooling. If you rely on Defender, schedule your 2025–26 migration now. (blog.openzeppelin.com)

Final word

DAOs are an organizational upgrade, not a magic trick. In 2025, you can launch with a legally recognized wrapper (Utah LLD, WY DAO LLC/DUNA, or RMI DAO LLC), operate with a Safe + Snapshot stack, add reality‑checked execution and arbitration, then step into on‑chain Governor with security councils, shielded voting, and robust identity. If you follow the sequencing and parameters above, you’ll avoid the traps others learned the hard way—and your community will actually want to govern with you.

If you’d like implementation help (entity setup, governance contracts, monitors, elections, or grants design), 7Block Labs can stand up the full stack, run security drills, and train your contributors.