Emerging Technologies
DAO
Definition
A Decentralized Autonomous Organization (DAO) is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government. A DAO's financial transaction record and program rules are maintained on a blockchain.
Why It Matters
DAOs represent a new model for internet-native organizations that are governed by their members in a decentralized way. They offer a new structure for collaboration and collective decision-making.
Contextual Example
A group of people could form a DAO to collectively invest in digital art. Members would buy governance tokens, which give them the right to vote on which NFTs the DAO should purchase.
Common Misunderstandings
- DAOs are still a very experimental form of organization, and they face significant legal and operational challenges.
- Decision-making in a DAO is typically done through voting with governance tokens.