How to Create a DAO with Colony?

Like traditional organizations, a DAO (Decentralised Autonomous Organisation) is an essential part of a blockchain entity as it serves as a collectively owned body geared towards its development. DAO allows different people worldwide to come together and seamlessly realize the goals and missions of their organization without trusting anyone.

Within a DAO, there is no leader or CEO, as everyone takes equal and equitable responsibility in decision-making and governance. Therefore, with the DAO, pre-programmed blockchain-based rules that define how the organization works and how finance is managed are set in place with the smart contract.

DAOs hold a promise of a better and decentralized future for organizational representation. The new paradigm promises seamless coordination and direction without centralization. With DAOs, decision-making is done via proposals and periodic voting, ensuring everyone within the organization has a say, thus promoting transparency.

However, the explosive growth of blockchain technology has revealed the flaws of many DAOs and their governance framework. Fortunately, Colony is pushing a new age of blockchain governance with its effective DAO toolkit.

Essentially, Colony is an Ethereum-based platform that simplifies the organization and management of DAO. This article will take you through how to easily create, manage, and organize your team and create a DAO with Colony.

What is Colony?

Colony is a decentralized, revolutionary, flexible, easy-to-use Ethereum-based protocol that provides everything a blockchain-based entity needs to create and manage a DAO.

With Colony’s on-chain solutions, anyone can seamlessly create and operate their entity’s governance, team, finance, revenue sharing, payment, and authority and even interact with Ethereum-based smart contracts.

Colony aims to provide an on-chain environment to provide everyone with an open, agile, and participatory governance mechanism. This makes it ideal for swift decisions and trust and risk management within a DAO.

The diversity of Colony’s DAO toolkit makes on-chain governance more flexible for real transparency and unparalleled accountability.

Another impressive feature of Colony’s DAO protocol is the Lazy Consensus, which enables seamless implementation of consensus actions hassle-free. Therefore, uncontentious consensus is implemented more rapidly.

Aside from this, using smart contracts allows users to automate budgeting, tasking, and member reputation. This way, users with pre-programmed reputation can participate in decision-making.

Features of Colony

The most basic part of Colony is the decision-making power it gives members of a blockchain organization via GOVERNANCE AND REPUTATION. With Colony, any project can empower its community with an earned reputation according to the value they contributes to the project.

It also features a lazy consensus where members can make decisions and complete work simultaneously. Other features include:

Token Creation

DAO finance is another aspect that Colony prioritizes, especially for its users. With its ERC20-compatible token creation protocol, projects can easily add native tokens and kickstart their financial journey.

With Colony, you can specify any ticker name, supply, lock duration, burn mechanism, and token reclaiming within the DAO. Colony also allows users to improve their token utility by staking, redistribution, and passive-earning activities.

Team and Work Management

Colony features an automated, powerful, and flexible management system that allows projects to easily manage their work and workforce.

Its persisting system provides a hierarchical system and gives specific authority to different domains within an organization.

Meanwhile, teams and working components of the organization can be managed from a single neatly arranged and intuitive dashboard.

Extension Manager

Another ingenious feature of Colony is its flexible drag-and-drop, easy-to-use extension manager, where an organization can add functionalities to suit their needs.

With Colony’s extension manager, users can install and customize DAO experiences while upgrading in-platform features.

Coin Machine

Colony provides an enabling platform for community members to give back to their communication via the coin machine. Money raised with the coin machine is returned to the DAO’s treasury and governed by pre-programmed rules.

How to Build a DAO with Colony?

As mentioned earlier, Colony is backed by Ethereum’s smart contract. Therefore, users must deploy a smart contract – a foundation of the group’s DAO. Afterward, other members of the DAO can join via application or invitation from an existing member.

After joining the DAO, members can contribute to the development of projects to earn a reputation and gain more significant voting power within the DAO. Before using Colony, ensure you set up a crypto wallet and connect to Gnosis Network.

Here’s a step-by-step guide on creating a DAO with Colony:

  1. Log in to your Metamask wallet
  2. Add Gnosis Network to Metamask
  3. Connect wallet to Colony
  4. Create DAO and DAO token

Log in to your Metamask wallet

Log into MetaMask extension

To get started with creating a DAO on Colony, open your Metamask wallet extension from the list of extensions available on your Chrome browser.

On the login page, input your wallet password and click on UNLOCK.

Add Gnosis Network to Metamask

Before using Colony, your wallet must be connected to the xDAI native network, Gnosis.

You can use Chainlist to automatically connect to the Gnosis Chain. Go to

Gnosis Network on Chainlist

Look for Gnosis using the search bar and click on CONNECT WALLET from the search result. Approve the connection prompt that pops up in your Metamask.

Add Gnosis Network on Metamask

After connecting Metamask to Chainlist, click on ADD TO METAMASK to add Gnosis to your wallet.

Alternatively, you can manually add Gnosis to your Metamask wallet.

Metamask Networks

Click on the three dots in the top right corner of the dashboard to open the Metamask menu. Within the menu, click on SETTINGS > NETWORKS.

In your Metamask network setting, you can review available networks and add Gnosis Network by tapping ADD NETWORK.

Add a Network on Metamask

To add Gnosis Chain, click on ADD A NETWORK MANUALLY and input the following information in their respective fields:

  • Network Name: Gnosis Chain
  • RPC URL:
  • ChainID: 100
  • Symbol: xDAI
  • Block Explorer URL:

Review the details and confirm by clicking SAVE.

Connect wallet to Colony

Launch Colony dapp

Once your wallet has been set up to Gnosis Chain, go to to begin setting up your DAO.

On the homepage, click on LAUNCH DAPP from the top left corner.

Create a Colony on Colony dapp

This will take you through a three-page sign-up process. To start creating a DAO, connect your wallet by clicking on the METAMASK icon.

Approve the connection in the prompt that pops up in your wallet.

Create DAO and DAO token

Choose username on Colony DAPP

Choose a unique username for your DAO and click CONTINUE to proceed.

Choose DAO Name on Colony dApp

Continue by inputting COLONY NAME and unique URL for anyone who wants to join the DAO and click on CONTINUE.

Choose Native Token for DAO on Colony dapp

Finally, create a native token for the DAO. With Colony, you can create a new token or use an existing ERC20 token like Sushi, ETH, AAVE, or UNI.

Create New Token for DAO on Colony dapp

To create a new native token, click on CREATE NEW TOKEN. Input the token name and symbol and click on CONTINUE.

However, if you want to use an existing token, import it with its Gnosis Chain contract address.

You can check available tokens’ contract addresses at Gnosis Chain blockchain explorer at

Paste the address in the field provided for TOKEN ADDRESS and click on CONTINUE.

Deploy Your Colony on Colony dapp

Review the DAO information and click on CONTINUE to confirm the action. Finally, sign all transactions and approve all prompts that pop up in your Metamask wallet.

Once you’re done, you can start inviting members and collaborators.

Exploring Your DAO

In the Colony dashboard, users can assign and create ACTIONS via the action tab. Here, the DAO can make crucial decisions and governance activities.

The EVENT tab is a log of everything going on within the DAO on-chain. These include in-DAO transactions, on-chain processing and tasks within the DAO.

The EXTENSION STORE allows users to build and customize experience and functionality in the Colony network.

Also, it allows Colony users to enjoy new updates and functionality like voting modules, governance modules and mechanisms within the platform.

The FINANCE tab gives a transparent overview of the DAO’s finances, transactions history, and current balance. Also, users can filter by team, community etc.


In conclusion, creating a Decentralized Autonomous Organization (DAO) with Colony represents a remarkable step toward a more transparent, decentralized, and efficient future for organizational governance.

As we’ve explored the features and steps involved, it’s evident that Colony offers a comprehensive toolkit to empower blockchain-based entities.

Colony’s innovative approach to governance, reputation, token creation, team management, and its extension manager provides organizations unparalleled flexibility and adaptability.

Building a DAO with Colony involves a well-structured process, from connecting your wallet to Gnosis Network to creating a unique DAO identity and defining your native token.

Once established, your DAO can thrive with decentralized decision-making, transparent financial management, and adaptable functionality.

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