DAO

What is DAO?

A DAO (Decentralized Autonomous Organization) is an entity that is governed by smart contracts rather than a central leader. It allows a global community to coordinate and manage resources together.

How does DAO work?

1. Rules and governance logic are written into smart contracts on a blockchain.
2. Members hold "Governance Tokens" that represent their voting power.
3. Anyone can submit a "Proposal" to the organization (e.g., spending funds).
4. Members vote on the proposal; if it passes, the smart contract executes the code automatically.
5. All decisions, votes, and treasury movements are transparent and publicly auditable.

Why does DAO matter?

DAOs enable "trustless" cooperation at a global scale. They remove the need for traditional hierarchies and allow for fairer, community-driven management of protocols, treasuries, and social clubs.

Key features of DAO

• No central authority or "CEO"
• Governed by transparent code
• Decision-making via token-holder voting
• Permissionless participation
• On-chain treasury management

Examples of DAO

• Uniswap DAO, which governs the parameters of the Uniswap protocol.
• MakerDAO, which manages the stability of the DAI stablecoin.
• ConstitutionDAO, a group that crowdfunded millions to try and buy a copy of the U.S. Constitution.