What Is A “DAO” (Decentralized Autonomous Organization)?

What is a decentralized autonomous organization (DAO)? Let's find out!
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What Is A Decentralized Autonomous Organization (DAO)?

DAOs– or “Decentralized Autonomous Organizations”– are decentralized entities that have become common in the crypto space, but which are not limited to crypto.

Camila Russo’s The Defiant defines Decentralized Autonomous Organizations (DAOs) as follows:

A decentralized autonomous organization (DAO) is an entity that enables a distributed group of actors to organize or achieve a certain goal or meet a mandate, broad or specific, by coordinating through a shared set of rules enforced on a blockchain. These rules are coded into smart contracts (mostly) with the help of ‘governance frameworks’ which we’ll discuss below.

In 2014, Vitalik Buterin – founder of Ethereum – wrote in regard to DAOs:

The ideal of a decentralized autonomous organization is easy to describe: it is an entity that lives on the internet and exists autonomously, but also heavily relies on hiring individuals to perform certain tasks that the automaton itself cannot do.

 

Why Do We Need DAOs?

The Ethereum Foundation writes that the need for DAOs is dictated by the lack of trust on the internet when handling financial or funding matters.

. . . it’s hard to trust someone you’ve only ever interacted with on the internet. With DAOs you don’t need to trust anyone else in the group, just the DAO’s code, which is 100% transparent and verifiable by anyone.

The Ethereum Foundation points out the following advantages of DAOs over traditional organizations:

  • DAOs are fully democratized and flat, while organizations are usually hierarchical.
  • The implementation of any changes in DAOs requires member voting.
  • Votes are tallied and changes are implemented automatically in DAOs.
  • Services offered by DAOs are handled automatically in a decentralized manner, which means that they are not prone to manipulation.
  • DAO activities are transparent and fully public.

One example of a DAO is Rune Christensen’s MakerDAO platform.

 

Examples Of DAOs/More Info

Below is a video from Bankless interviewing Chris Spadafora, the creator of BadgerDAO:

 

Here is a video from Coin Bureau on MakerDAO:

 

And finally, here is a video on the question of “What Is A DAO?” from the YouTube channel Blockchain Central:

 

 

 

 

Related Posts:

Founder Of MakerDAO Rune Christensen

Founder Of Chainlink Sergey Nazarov

Uniswap Founder Hayden Adams