What Are DAOs and How Do They Work?

 

DAO = Decentralized Autonomous Organization. It’s a new way to run online communities and businesses.

🧠 How Does a DAO Work?

A DAO is ruled by smart contracts and governed by token holders, not a CEO or boardroom.

Decisions (like funding or upgrades) are made by voting, usually with a governance token.

🧱 Real-World Examples

  • Uniswap DAO – manages the popular DEX

  • MakerDAO – oversees the DAI stablecoin

  • ApeCoin DAO – connected to the Bored Ape NFT community

✨ Benefits

  • Transparent rules

  • Community-driven

  • Borderless decision-making

⚠️ Challenges

  • Slow decision processes

  • Voter apathy

  • Smart contract risks

DAOs are a step toward true digital democracy — but they’re still evolving.

Comments