A DAO is an organization run by smart contracts and token holders instead of a CEO and a board. Decisions happen by vote. Token holders vote on proposals. If a proposal passes, the contract executes it. There are no executives in the usual sense. Operations sit on-chain. Anyone can see which proposals are live and how votes split.
A DAO can hold assets, control a treasury, hire contractors, and make grants. Governance token holders control that. Benefits are transparency and skin in the game. Holders are paid, in theory, when the organization does well, because they own a stake. Theft is harder when every transfer is public. The failure mode is plutocracy. Tokens pile up with wealthy holders.
Voting on dense technical changes fails when most voters do not read the implications. Proposal spam and vote buying show up. DAOs work best on narrow decisions and when token distribution is relatively even. They work poorly as a substitute for engineering judgment. No boards. No employees in the traditional sense. Everyone can see what proposals are being voted on and how votes are distributed.
org describes a DAO as a group coordinated by on-chain rules and a treasury, with votes recorded on the chain.
Decentralized Autonomous Organization (DAO)
Explore how DAOs operate through token-based governance, community voting, and automated smart contract execution
Token Distribution
Alice
250 tokens
Bob
150 tokens
Carol
200 tokens
Dave
100 tokens
You
100 tokens
Your voting power: 100 tokens = 12.5% of total supply