What is a DAO?
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Loading... - Arnaud Ambe
- 01 Sep 2022
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A DAO, which is short for Decentralized Autonomous Organization, is a term that is often used in the cryptocurrency space but not always widely understood. In short, a DAO is a set of organizational rules that is triggered automatically and removes the need for intermediaries. In this guide, we will give a more detailed explanation of what they are, how they are created, and everything else you need to know about DAOs.
What Is a DAO?
A Decentralized Autonomous Organization is, as its name implies, an organization that is decentralized in that it has no central government, and autonomous. Instead of being governed by a small team of executives, a DAO’s rules are set in code and enforced by the network of computers that run this software; this means that the rules are the same for everyone, no matter who they are, and unchangeable—so there is no finding loopholes to get out of your obligations or restrictions. As the code is law, there is no need for intermediaries who will ensure that the rules are followed.
A DAO’s decentralization usually means that it is democratized instead of being hierarchical. For example, any changes that should be implemented are voted upon by all participants instead of a single group of decision-makers. All the votes are automatically tallied and carried out by the software instead of relying on human intervention. This removes the possibility of vote counts being mismanaged or tampered with, leading to transparency and full visibility.
Thanks to the removal of the need to trust other participants in the DAO, this means that it can consist of many people who don’t know each other and would otherwise not be able to coordinate their common goals. In other words, they can transcend any physical limitations and be sure that all parties are working towards the good of the project itself. Read More...
