What is a DAO?
General description of a DAO
What Is a Decentralized Autonomous Organization (DAO)?
A decentralized autonomous organization (DAO) is an emerging form of legal structure that has no central governing body and whose members share a common goal to act in the best interest of the entity. Popularized through cryptocurrency enthusiasts and blockchain technology, DAOs are used to make decisions in a bottom-up management approach.
KEY TAKEAWAYS
A decentralized autonomous organization is an entity structure in which tokenholders participate in the management and decision-making of an entity.
There is no central authority of a DAO; instead, power is distributed across tokenholders who collectively cast votes.
All votes and activity through the DAO are posted on a blockchain, making all actions of users publicly viewable.
One of the first DAOs named The DAO was an organization created by developers to automate decisions and facilitate cryptocurrency transactions.
A DAO must ensure security is prioritized, as exploits can leave a DAO drained of millions of dollars of its treasury savings.
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