Back to Glossary
🏛️
DAO
DAO•blog.difficulty.intermediate
A DAO (Decentralized Autonomous Organization) is an organization governed by code and controlled by its members rather than a central authority.
Simple Explanation
Imagine a club where every decision is made by member voting, and all the rules are written in code that automatically executes. No president, no board of directors - just members and smart contracts.
How It Works
- Members buy tokens that give voting power
- Proposals are submitted for changes or actions
- Members vote using their tokens
- Smart contracts execute approved decisions automatically
Example
A DAO that manages a shared investment fund. Members vote on which projects to invest in, and the smart contract automatically sends funds to approved projects.
Use Cases
- Investment funds
- Charity organizations
- Gaming guilds
- Protocol governance