What is a DAO?
A DAO, or Decentralized Autonomous Organization, is an organization that operates through smart contracts on a blockchain. It is designed to be autonomous, meaning it functions without the need for a central authority or traditional hierarchical structure. Instead, decision-making and governance processes are carried out collectively by token holders or stakeholders.
Token holders in a DAO typically have voting rights, allowing them to participate in decision-making processes such as proposals, funding allocation, or policy changes. Voting power is often proportional to the number of tokens held, giving stakeholders a voice in the organization's governance.
DAOs are often used for community-driven projects, decentralized finance (DeFi) applications.