Glossary

Decentralized autonomous organizations (DAOs) are democratized internet-native groups of compatible individuals. DAOs work on the principles of flattened hierarchy and transparency and come together to achieve a common agenda.

What Is a Decentralized Autonomous Organization (DAO)?

Decentralized autonomous organizations are unions formed and operated without a CEO acting as a governing body. All members have equal voting rights in a DAO. The rules are hard-wired right into the code for everyone to view, and cannot be changed by any one individual. This means equal power for all and no absolute control for anyone.

DAOs have recently been gaining traction, especially with the 

. They open up all the internet's possibilities, while mitigating the risk of getting scammed. It allows like-minded groups to come together to work toward a common goal. Individuals in a DAO only need to trust the code, which is much less infallible than individuals. So far, the DAO holds great potential for the future of global partnerships and joint ventures.

Decentralized autonomous organizations have many moving parts that come together to make them possible.

Simply put, trusting a code that’s open for everyone to scrutinize is much easier than trusting an individual halfway across the globe. That’s exactly what makes DAOs the choice of groups who wish to come together without needing to trust each other explicitly.

Another great advantage the DAO offers is the uniform division of control. For instance, DAOs have great applications for fundraising, financing start-ups, and forming groups of freelancers.

DAOs also reduce the inherent risk of getting scammed. No information is hidden, and no “inner circles” are formed, since all members hold equal stakes. Goals and priorities are better aligned in a DAO than in more traditional group formations. 

This creates more transparency and also saves costs.

DAOs are sets of code and, like all software, are susceptible to hacks and scams. They’re globally distributed and are very difficult to regulate under any singular jurisdiction and set of laws. That’s why many are 

 is perhaps the most well-known example of just how the software can be manipulated. In July 2016, hackers stole nearly $50 million in Ethereum, resulting in a much-debated 

DAOs are relatively new phenomena that are growing in popularity. Some examples of successful DAOs include:

Decentralized Autonomous Organization (DAO)

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