Simple definition
A DAO, short for decentralized autonomous organization, is a group that makes decisions together using shared rules and online voting, often on a blockchain.
How it works
- Members hold tokens or passes that give them a vote.
- Someone proposes an idea, such as how to spend shared funds.
- Members vote and the result is recorded in public. Some actions can then run automatically.
Everyday example
In real life
A creators' collective uses a DAO to vote on which new member projects to support.
Benefits and why this matters
Why this matters
DAOs show how communities might run themselves online. They also show the limits, so they are a good case study.
- Open and transparent decisions
- Members can take part from anywhere
- Clear, written rules
Risks and limitations
Things to watch out for
- Watch out: A few large holders can dominate votes
- Watch out: Legal status is unclear in many places
- Watch out: Scams can pose as DAOs to collect money
Your beginner action
Try this
Read how one DAO describes its rules, and note who can vote and who makes which decisions.