Glossary entry
DAO (Decentralised Autonomous Organisation)
DeFiA DAO governs a shared treasury through token-weighted on-chain votes. How proposals execute, plus the turnout, concentration and legal caveats.
Definition
A DAO is an organisation whose rules and treasury live in smart contracts, so decisions are made by token-weighted votes on proposals rather than by an executive team. A typical flow is a forum discussion, an off-chain signalling vote, then an on-chain proposal that, once passed, executes the change directly. The name entered wide use with The DAO in 2016, an investment vehicle drained through a contract flaw, an episode that led to the Ethereum hard fork. Modern DAOs face plainer problems: voter turnout is low, large holders can decide outcomes alone, and legal status varies by jurisdiction, so members may hold real-world liability without a clear corporate wrapper.
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