Creating a DAO Smart Contract: Fees, Time, and More
Published June 6, 2022.
Smart contracts are self-executable programs running on a blockchain network, which automatically activate upon the fulfillment of transactional requirements. These "predetermined conditions" are embedded into the code of each smart contract, and the decentralized nature of the blockchain network allows multiple participants to come to an agreement in a trustless manner. The primary aim of a smart contract is to eliminate the need for any intermediaries and serve as a stop-gap to any waste of execution time as a result of third-party involvement.
How Does a Smart Contract Work?
Smart contracts work following the use of a series of straightforward executions of code, which is domiciled on the blockchain. The idea behind smart contracts supposes that "when" or "if" a requirement is met, "then" the execution of one stage of the contract must have been said to have been validated and completed.
Once the necessary conditions are met, the blockchain begins updating the commands from the smart contract, this validates the contract. It is also impossible to alter the agreement terms upon deploying a smart contract. This approach helps enforce trust amongst the agreeing parties.
Smart contracts are akin to business rules, but the difference here is that they operate autonomously, involve multiple entities, and can transcend corporate boundaries. They provide a faster, cheaper, and more secure method of managing and executing agreements.
Smart Contract Execution Fees
Following the need to build a legally binding smart contract for intending parties, the question arises, who pays for smart contract execution fees? Well, simply put, you are responsible for paying the deployment fee upon launching a smart contract on a blockchain.
However, other users of your smart contract will pay a fee to use your contract if they decide to use it, while the miners take the fees from the transactions, which include the "gas" cost of executing your contract.
When creating a smart contract, it is important to also have a grasp of how much it costs to create a smart contract. The cost of creating a smart contract largely depends on the amount of byte code needed to run the program.
It is important to have an idea of the amount of bytecode that will be used in the compiled contract. This is because, the more bytecode you make use of, the more storage you will require. Also, each byte costs 200 ETH gas. Over time, this will add up and could become a financial burden.
Other factors to consider before creating a smart contract include:
- Gas fees You need to have an idea of what the gas fees are like and how much would be needed for the type of project you intend to run.
- The transaction data The transaction data All the bytecode you send as transaction data will determine the costs for non-zero bytes and for zero bytes.
- The code For the architect of the code to accept that the contract is running pretty well, you will require a lot of computation to generate the bytecode. This will make the construction of the smart contract expensive.
How Long Does It Take to Create a Smart Contract?
There is no specific time frame for smart contract creation. It all depends on the scope of the contract, its contents, and the skill of the developer. It may take between 16 seconds to 1 minute to build a fully functional smart contract and another 5 minutes for a smart contract user to begin transacting on Ethereum.
The Role of Smart Contracts in a DAO
A DAO isn't exactly a smart contract pe say, but smart contracts make up the backbone of its operation. "DAO stands for "Decentralized Autonomous Organization." It is an organization run by an automated program using computer codes. DAOs are accessible to anyone provided they meet the necessary requirements.
The DAOs autonomous features are powered by smart contracts which help run the majority of its processes without human interference. Understanding DAOs is quite easy if it is created and managed by a community, which collectively manages its funds and projects.
How to Create a DAO Smart Contract
DAOs are becoming quite popular, and like any other new innovation, there are advantages and disadvantages of DAOs. However, this hasn't stopped developers from building DAOs and seeking new ways to create decentralized organizations.
Starting a DAO smart contract, one can employ the services of web3 developer platforms like Moralis.
This will involve 2 key steps:
- Setup a Moralis server This is the first step and it will involve creating a Moralis account from the sign-up page and then logging in and creating a Moralis server via the Testnet Server” option. After this, you can then access your server details and proceed to initialize Moralis.
- Input smart contract code After initializing Moralis, the final step is to write the code for the DAO smart contract. A DAO smart contract should contain important information on voting, polls, and conditions for participating in the DAO.
