This guide was built to help you understand the benefits of incorporating your DAO and how the process of DAO incorporation works. We help you answer questions like:
Why should I incorporate my DAO? In what geographic jurisdiction should I incorporate my DAO? What legal entity type should I choose?
Get all the information you need to make the best decisions for you DAO by reading this guide.
By
MIDAO
Clear mission, vision, and values drive DAO success, ensuring focus, alignment, and adaptability in Web3.In the rapidly evolving world of Decentralized Autonomous Organizations (DAOs), having a clear mission, vision, and values isn't just good practice—it's essential for survival and success. During a recent episode of the Just DAO It podcast, Anthony, CEO of Aragon X, and Jessica Smith, Head of Communications at Aragon, shared crucial insights about the importance of maintaining a strong organizational compass in the DAO space.
"For me, the most important thing that people often get wrong is they don't follow their North Star," explains Anthony during the podcast interview. "Why are you doing what you're doing? What is the purpose of launching a DAO? What are you trying to achieve? People lose sight of that all the time. They'll launch a DAO, or they'll launch a token, but they haven't thought deeply about the why."
This observation cuts to the heart of a critical challenge in the DAO ecosystem. While technical infrastructure and governance mechanisms are important, they must serve a clear purpose and direction. The mission isn't just a nice-to-have—it's the foundation that guides every decision and development in a DAO's lifecycle.
While many DAOs create detailed constitutions and governance documents, Anthony suggests an even more fundamental approach: "While a constitution can be valuable—especially a concise one—I think having a clear mission, vision, and values is even better. These foundational elements help ensure that everyone involved understands what the DAO is trying to achieve and how they can contribute to that shared purpose."
One of the most compelling insights from the podcast discussion was how a DAO's purpose should dictate its structure. As Anthony explains, "If your goal is to run a great grants program, that's a very different structure than building a product. You need to design your DAO to support that specific goal. If you're building a product, you need to ensure the DAO is structured to enable, not hinder, that development."
This perspective challenges the one-size-fits-all approach that some DAO creators attempt to implement. Instead, it advocates for thoughtful design that aligns with specific objectives.
"Where DAOs often falter is when they lose sight of what they're trying to achieve," Anthony notes. "This can happen through overextending in certain areas—whether it's decentralization, trust minimization, token liquidity, or even how permissionless contributors are. All of these should be decisions that align with the DAO's core purpose."
Lido serves as a prime example of a DAO that maintains strong alignment with its mission. As Anthony describes, "I always use Lido as the best example of a project that needs to be a very decentralized DAO. That's why they have binding on-chain execution. They're a true DAO in that sense... They need that level of decentralization because they simply cannot afford to be captured. They cannot afford to have these types of problems because they govern $30 to $36 billion on their contracts."
This case demonstrates how mission clarity drives structural decisions. Lido's need for robust decentralization isn't arbitrary—it's directly tied to its role in managing substantial assets and its commitment to being censorship —and capture-resistant.
Not every DAO needs to start with the same level of decentralization as Lido. As Anthony points out, "Some projects don't need that level of decentralization—at least not yet. For example, projects in their earliest phases, still in the startup stage and pre-product-market fit, need to move quickly."
For DAOs looking to strengthen their mission alignment, several key steps emerge from the podcast discussion:
While maintaining mission focus is crucial, Jessica emphasizes the importance of adaptability: "It's wise to build adaptability into your plans and assumptions. Assume that novel forms of governance will pop up, just as they have in the past, and leave room to explore and adopt solutions that may be a better fit as your DAO grows and evolves."
This suggests that while the core mission might remain constant, the methods for achieving it can evolve as new tools and approaches become available.
One significant challenge for DAOs is maintaining focus amid rapid industry evolution. As Anthony observes, "DAOs often get distracted by the fast pace of this space, the shiny narratives, and the 'next big thing.' Instead, we need to focus on designing DAOs that are laser-focused on achieving their goals."
Another common mistake is becoming too focused on governance mechanisms while losing sight of their purpose. The podcast discussion emphasizes that governance structures should serve the mission, not the other way around.
A third critical pitfall emerges when DAOs lose touch with their community's needs and aspirations. As Jessica points out in the discussion, "When you're building something revolutionary, something that doesn't exist yet, by definition, you won't have clarity on how it fits within the current societal or legal constructs." This uncertainty can lead to a disconnect between the stated mission and the actual needs of the community the DAO serves.
As DAOs mature, their ability to maintain mission alignment while adapting to changing circumstances becomes increasingly important. This doesn't mean changing the core mission, but rather evolving how it's achieved.
The development of new DAO tools and frameworks should always serve the organization's mission. As Anthony notes, "What's exciting is that we finally have the technology to do this. Over the past few years, we've worked at Aragon to build systems that offer flexibility and adaptability."
The future of mission-driven DAOs lies in their ability to harness community insight for innovation. When discussing the evolution of governance models, Anthony emphasizes, "We need to get much deeper into the root of the problem and start to fix the incentives." This suggests that successful DAOs will be those who can align their mission with genuine community engagement and participation.
The success of a DAO ultimately depends not on its technical sophistication or governance complexity but on its ability to maintain clear direction and purpose. As Anthony concludes, "If you're continuously aligned on your mission, vision, and values, you might not even need a constitution. If every decision you make as a DAO stays true to those guiding principles, you avoid the pitfalls that throw many DAOs off balance."
For those building or participating in DAOs, the message is clear: start with why, build around that purpose, and let it guide every decision. In the dynamic world of Web3, a clear mission isn't just helpful—it's essential for sustainable success.
