DAO (Decentralized Autonomous Organization)
Decentralized organization governed by token holders through voting.
A DAO (Decentralized Autonomous Organization) is an organizational form where rules are encoded in smart contracts, and decisions are made by token holder voting — without a CEO, board of directors, or central control.
How it works:
•Stakeholders buy or earn governance tokens
•Each token = one vote
•Proposals are published and voted on-chain or off-chain (Snapshot)
•If a proposal passes quorum, it is automatically executed
Famous DAOs:
•Uniswap DAO — controls protocol parameters and $3B+ treasury
•MakerDAO — governs the DAI stablecoin
•ENS DAO — Ethereum Name Service
•Compound DAO — DeFi lending protocol
DAO criticisms:
•"Plutocracy" — whoever has more tokens has more power
•Low voter turnout
•Slow decision-making
•Security risks (The DAO hack 2016)