What Is a DAO: Promoting Governance With No Central Authority

A decentralized autonomous organization, or DAO, is a unique way to connect people using blockchain technology. Its structure is quickly becoming popular among users who have common goals and a desire to collaborate. DAOs are innovative because they give every member an equal voice.

New DAOs are emerging every day. Whether you want to grow your investments using NFTs or donate funds to a charity, a DAO could be the answer. This guide demystifies DAOs, how they use blockchain technology, and what their advantages are over traditionally structured organizations.

What Is a DAO?

A DAO is a blockchain-governed autonomous organization owned by its community members. It does not have a governing CEO or board of directors. The collective utilizes smart contracts to lay foundational rules, and is designed to give members equal votes on changes or modifications.

At any given time, members can create proposals to improve the DAO’s protocol, after which all community members have the opportunity to vote on them. Proposals with a predetermined percentage of votes in their favor will be accepted and implemented, based on the rules within the smart contract.