A Decentralized Autonomous Organization (DAO) refers to an organization run by smart contracts on a blockchain, without the need for a central authority overseeing its operations.
DAOs operate through a set of rules encoded in smart contracts that automatically execute decisions based on the consensus of its members. This allows members to propose and vote on various decisions within the organization, such as funding allocations or changes to the rules.
One of the key features of DAOs is their decentralized nature, meaning they do not rely on a single entity to make decisions or enforce rules. Instead, decisions are made collectively by the members of the organization through a transparent and automated process.
DAOs have gained popularity in the cryptocurrency space for their potential to revolutionize traditional organizational structures, enabling more efficient and transparent decision-making processes. However, they also face challenges such as security vulnerabilities and regulatory uncertainties.
