The Role of DAOs in Gaming & How to Participate?

05 Mar 2024

What is a DAO_ A Simple Explainer - cover (1)

Traditionally, the gaming industry has been characterized by a top-down approach where decisions are made by a small group of developers and corporate entities. This structure often leads to a lack of community engagement and limited input from players in the game development process. Gamers frequently feel disconnected from the creative process and have limited control over the games they love.

Imagine a world where gamers are not just passive consumers but active participants in the decision-making processes of their favorite games.

“I happily played World of Warcraft during 2007-2010, but one day Blizzard removed the damage component from my beloved warlock's Siphon Life spell. I cried myself to sleep, and on that day I realized what horrors centralized services can bring. I soon decided to quit.”

  • Vitalik Buterin | Founder, Ethereum

Enter DAOs in gaming – a paradigm shift that empowers players by giving them a voice and a stake in the gaming ecosystems they are part of.

But what exactly are they, and how are they rewriting the rules, fostering player ownership, and opening up exciting new avenues for participation?

The Need for Decentralized Game Governance

The current issue with governance in video games often revolves around centralized control, where decisions about game development, updates, in-game economies, and community policies are made exclusively by the game developers or parent companies. This centralization can lead to several challenges:

  • Lack of Community Input: Players, who are crucial stakeholders, often have little to no say in the game's direction, updates, or policy changes. This can lead to dissatisfaction and a disconnect between the players and the developers.
  • Inflexibility: Centralized governance can be slow to respond to community needs and changing market dynamics, leading to missed opportunities and a failure to address pressing issues in the game environment.
  • Economic Concerns: In many games, particularly in the realm of online and multiplayer games, economic decisions are centrally controlled, which can lead to imbalances, a lack of transparency, and issues with fairness.
  • Trust Issues: Players must trust the company to act in the best interest of the community, which is not always the case, especially when profit motives overshadow player experience.

Decentralized governance structures, such as Decentralized Autonomous Organizaitons (DAOs), offer a compelling alternative that can address many of these issues:

  • Democratic Decision-Making: DAOs allow for a more democratic process where players and other stakeholders can have a say in game development, policy changes, and other critical decisions. This can lead to greater satisfaction and a sense of ownership among players.
  • Increased Flexibility and Agility: Decentralized governance can be more responsive to community needs and market changes. It allows for quicker adaptation and implementation of ideas that are beneficial to the game and its community.
  • Transparent and Fair Economic Systems: DAOs can facilitate more transparent and fair economic systems within games. Smart contracts and blockchain technology can be used to manage in-game assets, ensuring fairness and transparency in transactions.
  • Enhanced Trust and Community Engagement: When players have a say in the governance of a game, it builds trust and fosters a stronger community. This can lead to a more engaged player base and potentially longer game lifespans.

What are DAOs in Gaming?

Gaming DAOs are decentralized, blockchain-based organizations where community members collectively govern and make decisions regarding game development, funding, and operations, often using tokens for voting and rewards. They promote autonomy, transparency, and community engagement in the gaming industry.

Unlike traditional organizations, they lack a central authority and operate through consensus-based decision-making fueled by token-based voting mechanisms. This transparent and democratic structure is revolutionizing numerous industries, including gaming.

How Do Gaming DAOs Work?

Here's a breakdown of how DAOs function in web3 gaming.


Unlike traditional gaming companies, which have a centralized authority, DAOs operate on a decentralized model.

This means that decision-making is spread across a network of participants rather than being concentrated in the hands of a few executives or developers. This decentralization is often facilitated by blockchain technology.


DAOs are autonomous in the sense that they are governed by rules encoded as a computer program. These rules are transparent and enforced by the network, reducing the need for intermediaries or centralized control.

Community Governance

In gaming DAOs, key decisions, such as game development directions, allocation of funds, and changes to rules or features, are typically made through community voting.

Token holders (players, developers, investors) in the DAO have voting rights, often proportional to the number of tokens they hold.


DAOs in gaming often have an associated cryptocurrency or token. These tokens can have multiple uses, like in-game currency, a stake in the game's economy, or voting power in governance decisions. The economic model can incentivize players and contributors to participate in the ecosystem.

Transparency and Trust

The use of blockchain technology ensures transparency in transactions and decision-making processes. This builds a higher level of trust among participants compared to traditional gaming models.

How are DAOs Changing Gaming?

Community-Driven Development

Community-driven development (CDD) goes beyond simple player feedback. It's a collaborative approach where players actively participate in shaping the game's features, content, and direction.

This can range from small-scale decisions like character design elements to major changes in gameplay mechanics and even overarching storylines. For example, in Decentraland, players own parcels of land, build experiences, and participate in governance.

Challenges of Community-Driven Development

  • Managing diverse opinions and expectations: Navigating the complexities of diverse player preferences and expectations can be challenging as it involves finding a balance among the differing needs of various gaming communities.
  • Maintaining control and ensuring quality: Striking a balance between allowing creative expression and upholding the original vision and quality of the game poses a significant challenge.

Ownership of In-game Assets

The integration of Non-Fungible Tokens (NFTs) and DAOs is revolutionizing ownership within the gaming industry. This combination empowers players with true ownership of digital assets like characters, items, and even virtual land, enabling opportunities to build real-world value beyond traditional gaming experiences.

For example, Axie Infinity allows players to raise and battle creatures (Axies) as NFTs, with a DAO overseeing the game's development and treasury.

Challenges of Ownership of In-game Assets

  • Regulatory Issues: The fusion of NFTs and DAOs within the gaming sector is in its early stages, facing hurdles such as legal uncertainties and fluctuations in the market.
  • Lack of Transparency: Additionally, it's important to note that not every game utilizing NFTs and DAOs ensures genuine asset ownership or impactful player governance.

Shared Profits and Rewards

DAOs are revolutionizing the way in-game economies function. By enabling the sharing of revenue generated through the game with token holders, DAOs incentivize participation, reward players for their contributions, and enable a collaborative ecosystem where player actions directly impact the game's success.

For example, Yield Guild Games (YGG) invests in blockchain games and NFTs, providing members with access to exclusive in-game assets and earning opportunities.

Challenges of Shared profit and rewards

  • Sustainability and Token Value: Maintaining a healthy and sustainable in-game economy is crucial. If rewards outweigh revenue generation, the token value could plummet, disincentivizing participation.
  • Governance and Decision-Making: DAOs rely on community consensus for decision-making. Achieving consensus among a large number of token holders can be slow and inefficient, potentially hindering development and adaptation.

Why is Transak Important in the Gaming Industry?

Transak is a payments firm that offers comprehensive and efficient payment solutions for the gaming industry.

Transak provides customizable on and off-ramp solutions. Transak's services cover over 177 countries, support transactions in 30 seconds with lite KYC, and allow direct fiat to smart contract transactions. This infrastructure aims to empower games to reach global markets easily with a single integration, supported by partnerships with major Web3 brands​.

The platform also revolutionizes the NFT experience, making it as simple as any online purchase. Without the need for in-depth crypto knowledge, users can acquire NFTs using their preferred payment methods, simplifying access for all.

Additionally, Transak enables the bundling of multiple NFTs for sale in a single transaction, offering flexibility in pricing from as low as $0.01 to as high as $75,000.

Beyond these core features, Transak further benefits users with a high approval rate of 95%, indicating a smooth and satisfactory platform experience. With support for over 170 cryptocurrencies, gamers have a wide range of options at their disposal.

The platform also allows for customizable sales limits on NFTs to cater to diverse audience needs and integrates seamlessly with Web3 platforms like Web3auth and Biconomy, enhancing the overall utility and accessibility for users in the gaming and NFT space.

How Do You Participate in a Gaming DAO (Sandbox) Using Transak?

The Sandbox is a virtual world built on the Ethereum blockchain, where users can create, play, and monetize their experiences. It utilizes $SAND, its native token, for various functions within the ecosystem. The best part is that you can easily purchase $SAND from Transak. Here's a step-by-step guide that will help you through the process:

Phase 1: Registering on The Sandbox

  • First, visit the website: and click "Create Account."

  • Then sign up via Wallet Connect and scan the QR code with your Web3 wallet and confirm the transaction.

  • Next, fill in your details and create a username, password, and email address, and then click on "Create Account" again

  • Then click on the pop-up that will appear on the screen to proceed further
  • Now, you can either create a custom avatar or choose from the ones available

  • Lastly, to verify your identity complete the KYC process using face scan and ID verification to unlock staking and voting. Moreover, completing KYC unlocks the crucial voting feature. By staking your $SAND, you actively participate in shaping the future of The Sandbox

Phase 2: Purchasing $SAND with Transak

  • First, visit Transak: and click "Buy/Sell Crypto."
  • Then, choose your payment method (e.g., credit card, bank transfer).
  • Next, choose $SAND and click on "Buy Now."
  • Now, enter your wallet address and make sure it matches the one you used to register on The Sandbox.
  • Lastly, verify your email address and enter the code you receive to confirm and complete the purchase.

Phase 3: Staking your $SAND

  • First, navigate to the "$SAND" page on the website.
  • Then choose your staking option based on your desired lock-in period and rewards.
  • Finally, select the amount you want to stake and confirm the transaction.

The Potential of DAOs in Revolutionizing Gaming

Interoperable Assets

One of the most groundbreaking possibilities introduced by DAOs lies in their potential to dismantle the siloed nature of traditional gaming and usher in an era of interoperability.

Imagine a future where your hard-earned NFT sword from Axie Infinity isn't just a trophy confined to that specific game, but becomes a prized possession you can wield in The Sandbox, or even rent out in Decentraland to fellow adventurers.

While technical hurdles and the need for standardization exist, projects like OpenSea and Enjin are already laying the groundwork for interoperability through open-source protocols and blockchain standards.

Guilds and Social Impact

DAOs have the potential to fundamentally reshape the power dynamics within the gaming industry, placing communities and guilds at the forefront. By transforming into DAOs, gaming guilds can own servers, customize gameplay, and host unique events, creating vibrant ecosystems. DAOs could also function as venture capitalists, funding new games that resonate with their community's values. Moreover, they might organize large-scale events across games, enhancing inter-community interaction.


Game DAOs empower players with significant ownership and decision-making capabilities, fostering a more engaged and committed community. By participating in DAOs, users don't just play a game; they contribute to its evolution, sharing in its successes and shaping its future.

“If World of Warcraft moves onto Ethereum, I’ll consider playing again.”

— Vitalik Buterin

Transak provides users with an efficient and reliable platform to participate in some of the gaming DAOs by acquiring the game’s native tokens. For developers and studios, Transak also offers a complete web3 gaming payment stack.

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About the Author:

Transak Team