DAO
A DAO, or Decentralized Autonomous Organization, is a community-led organization that uses blockchain tools for governance and decision-making.
✦ Key Insight
DAOs allow token holders or members to vote on proposals, treasury spending, and protocol changes.
✕ Common Misconceptions
Assuming all DAOs are fully decentralized or well-managed.
Related Terms
Detailed Explanation
How It Works
Members submit proposals. Eligible voters vote using tokens or membership rights. Approved actions may be executed on-chain or by multisig signers.
FAQs
Are DAOs legal companies?
Not always. Legal status depends on jurisdiction and structure.
In Practice
Dig Deeper
Governance Token
A governance token is a token that grants its holders the right to vote on changes to a protocol — fee parameters, treasury spending, code upgrades, or strategic decisions. Holding the token is the on-chain equivalent of owning a share of the project's decision-making.
Multisig Wallet
A multisig (multi-signature) wallet is a smart-contract or script-based wallet that requires multiple independent signatures to authorize a transaction — for example, 2-of-3 or 3-of-5 — instead of a single private key.
Treasury
A treasury is a pool of funds controlled by a project, DAO, foundation, or team.
Proposal
A proposal is a formal suggestion submitted to a DAO or project community for discussion and voting.
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