A DAO is a Decentralized Autonomous Organization. It’s an organization using the application of blockchain and smart contracts as a means of coordination.
The idea is to remove centralized leadership from a project/group and make it community-owned by replacing traditional organization infrastructure with on-chain and open-sources rules defined inside smart contracts.
Anonymity is also important in crypto. DAOs allow you to work seamlessly with strangers by defining shared rules between all members via a smart contract, all you need is a wallet address !
It’s an effective and safe way to work with like-minded individuals around the globe.
| DAO | Traditional Organization |
|---|---|
| Usually flat, and fully democratized | Usually hierarchical |
| Voting required by members for any changes to be implemented | Depending on structure, changes can be demanded from a sole party, or voting may be offered |
| Votes tallied, and outcome implemented automatically without trusted intermediary | If voting allowed, votes are tallied internally, and outcome of voting must be handled manually |
| Services offered are handled automatically in a decentralized manner (e.g Distribution of philanthropic funds) | Requires human handling, or centrally controlled automation, prone to manipulation |
| All activity is transparent and fully public | Activity is typically private and limited to the public |
You can learn more about DAOs on the Ethereum.org website.