Technical Definition
DAO (Decentralized Autonomous Organization)
An organisation governed by token holder votes, with decisions executed by smart contracts rather than by a management structure.
By Crypto University Editorial
Governance Token · Proposal · Treasury · Governance Risk · Decentralization
✦ Key Insight
If you hold a governance token, the DAO controls decisions that affect your position — including fees, emissions and, in some cases, the contracts holding your funds.
✕ Common Misconceptions
Assuming decentralised governance means dispersed control. Check voter turnout, delegate concentration and whether a multisig retains emergency powers that override votes.
Detailed Explanation
Token holders propose and vote on changes — treasury spending, parameter adjustments, upgrades. Approved proposals can execute automatically on-chain. Participation is typically low, so effective control often sits with a small number of large holders.
In Practice
“A DAO votes to change a protocol's fee parameter, and the change executes automatically after the timelock expires.”