How DAO Governance Works in Practice

What Is a DAO, Exactly?

A DAO — decentralized autonomous organization — is a community-run entity where decisions are made collectively by members rather than by a single owner or corporate board. Rules are encoded in transparent protocols, votes are recorded publicly, and no single person can override the group.

If that sounds abstract, think of it this way: a DAO is like a homeowners association, except the rules are enforced by code rather than by a property manager, and every decision is visible to every member. No backroom deals. No hidden agendas.

Built By DAO uses this governance model for community-owned housing. The people who live in a building collectively decide how it is managed, maintained, and developed.

How Proposals Work

Any member of the Built By DAO community can submit a proposal. A proposal is a formal request for the community to take a specific action. It follows a structured process:

Step 1: Draft and Submit

A member writes a proposal that includes:

• Title — a clear, specific name
• Summary — what the proposal does and why
• Details — the full scope, cost estimates, timeline, and any relevant data
• Category — maintenance, community rules, development, financial, or governance

Proposals are submitted through the member portal and become visible to all community members immediately.

Step 2: Discussion Period

Every proposal enters a mandatory discussion period — typically 7 days — before any vote takes place. During this time, members can:

• Ask questions in the proposal's discussion thread
• Suggest amendments
• Flag concerns or potential issues
• Signal preliminary support or opposition

This period exists to prevent hasty decisions. Complex proposals (like approving a new development project or changing the equity distribution formula) may have longer discussion periods.

Step 3: Voting

After the discussion period closes, the proposal moves to a formal vote. Voting is open for a defined window — usually 5 days for standard proposals, 10 days for major governance changes.

Every member's vote is weighted by their EQT balance — the equity credits they have accumulated through rent payments and participation. This means the people with the most at stake have proportionally more influence, while ensuring every member has a voice.

The voting threshold depends on the proposal category:

• Standard proposals (maintenance, community rules): Simple majority (>50%)
• Financial proposals (budget allocation, fee changes): 60% supermajority
• Governance proposals (changing voting rules, equity formula): 67% supermajority
• Emergency proposals (safety issues, urgent repairs): Can be fast-tracked with 72-hour vote and simple majority

Step 4: Execution

Approved proposals are executed by the operations team or, where applicable, automatically through smart contracts. Every action taken in response to a proposal is logged and linked back to the vote that authorized it.

What Members Actually Vote On

Governance is not theoretical at Built By DAO. Here are real categories of decisions that go to member vote:

Maintenance and Improvements

• Should we replace the HVAC system this year or repair it?
• Do we approve a $15,000 landscaping upgrade to the courtyard?
• Which contractor bid do we accept for roof repairs?

Community Standards

• What are the quiet hours for common areas?
• Should we allow pets in the building? What size limits?
• How do we handle shared amenity reservations?

Financial Decisions

• How much of the annual reserve fund should be allocated to preventive maintenance versus capital improvements?
• Should we adjust the common area fee structure?
• Do we approve the proposed annual budget?

Development Priorities

• Should Built By DAO pursue a second property in this metro area?
• What unit mix (studio, 1BR, 2BR, 3BR) should the next development target?
• Should we prioritize a building with ground-floor commercial space?

Multi-Sig Controls: The Safety Net

For financial decisions, Built By DAO uses multi-signature (multi-sig) controls. This means no single person — not even the DAO founder — can move funds unilaterally.

Here is how it works:

• A multi-sig wallet requires 3 out of 5 designated signers to approve any transaction above a set threshold.
• Signers are elected by the community and serve rotating terms.
• All transactions are recorded on-chain, meaning any member can verify that funds moved exactly as the approved proposal specified.

Multi-sig controls prevent fraud, embezzlement, and unauthorized spending. They also create a clear audit trail that traditional property management companies rarely provide.

Transparency by Default

Every piece of the governance process is visible to every member:

• Proposals are public from the moment they are submitted
• Votes are recorded permanently and can be audited at any time
• Financial transactions linked to proposals are visible on-chain
• Meeting notes from operational calls are posted to the member portal
• Contractor bids and cost comparisons are shared with the community before votes

This level of transparency is rare in housing. Most renters have no idea how their building's budget is allocated, what maintenance is planned, or why their rent increased. At Built By DAO, all of that information is available by default.

Common Questions About DAO Governance

"Do I have to participate in every vote?"

No. Voting is optional, and you can delegate your voting power to another member you trust if you prefer not to engage on every issue. Quorum requirements ensure that decisions are not made by a tiny minority.

"What if I disagree with a decision?"

You can always propose amendments or new proposals to revisit a decision. Built By DAO also has a formal appeals process for decisions that members believe were made with incomplete information.

"Can the DAO change the equity formula?"

Yes, but only through a governance proposal requiring a 67% supermajority. This is the highest threshold, ensuring that the fundamental economic terms cannot be changed lightly.

"How do I know the votes are legitimate?"

All votes are recorded on-chain with cryptographic verification. Vote tallies are publicly auditable, and the voting smart contract is open-source. No one can alter the results after the fact.

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Have a Say in Where You Live

Built By DAO gives residents real decision-making power. Your vote shapes your building, your community, and your future. No landlord making unilateral calls — just transparent, democratic governance.

Join the waitlist to become a founding member, or learn more about how it works.