Published in Crypto
3 minutes read

What is a DAO?

What is a DAO?

Since the foundation of the first DAO back in 2015, these organizations have taken the crypto businesses and organizations by storm. Let’s dive into this new way of governance and see what makes it highly effective compared to traditional businesses:

For starters, what is a DAO?

A DAO stands for Decentralized Autonomous Organization. It is an organization that has a flat hierarchy, and isn’t controlled by a a single owner/director. Instead, the rules of the DAO are voted on by the community members who hold the DAO’s token.

How do DAOs work?

DAOs use tokens and smart contracts for maintaining order and transparency. For instance, every community member has the right to submit a proposal. Other members can vote on whether to accept the proposal or not using their tokens.

Every proposal and every penny spent from the DAO’s treasury are can be viewed on the blockchain.

How to contribute in a DAO?

There are many ways in which a person can help grow the DAO. The most common ones include: doing bounties, participating in contests, submitting a proposal, and joining a guild.

In essence, DAO members can participate on bounties and contests offered by the DAO on platforms like Layer3 and Rabbit Hole. They can also join guilds, which are groups of people who master a given skill within the DAO.