A Decentralized Autonomous Organization, or DAO, is a type of organization that is run using smart contracts on a blockchain platform. Because it is decentralized and autonomous, it does not have a traditional system in which people are arranged according to their ranks or management structure. Instead, decisions are made and actions are taken based on the rules implemented in the smart contract. This allows for a more transparent way of running an organization.
Benefits of a DAO :
One of the main benefits of a DAO is that it allows for more transparent and democratic decision-making. Because the rules and procedures for making decisions are implemented in smart contracts, everyone can see exactly how decisions are made and can have a say in the process.
Another benefit of a DAO is that it can be run more efficiently than a traditional organization. Because it is autonomous, it can make decisions and take action without needing to go through a traditional decision-making process. This can save time and resources, and allow the organization to react more quickly to changing circumstances.
This smart contract encodes the rules and procedures for decision-making and actions within the organization. Anyone who wants to participate in the DAO can do so by interacting with the smart contract using a blockchain wallet.
Once a decision needs to be made, the smart contract will automatically initiate a vote. All members of the DAO can then cast their votes, and the smart contract will tally the votes and determine the outcome. Depending on the rules implemented in the smart contract, the outcome of the vote may automatically trigger certain actions within the organization.
Few well-known DAOs
MAKER DAO
UNISWAP
BESSEMER DAO
FLAMINGO DAO
CONSTITUTION DAO
FRIENDS WITH BENEFITS
BANKLESS DAO
AAVE GRANTS DAO