Learn Crypto : Decentralized Autonomous Organization (DAO) DA | Cryptoverse

Learn Crypto : Decentralized Autonomous Organization (DAO)

DAO is an abbreviation for Decentralized Autonomous Organization. In general, a DAO is a set of hard-coded rules that govern the behaviour of a decentralised organisation. However, the word DAO may also refer to a specific organisation named "The DAO," which was conceptualised in 2016 on the Ethereum network.

Simply described, a DAO is a type of organisation that, unlike traditional corporations, is built on open source code and is totally run by its community. As a result, a DAO's basic structure and operating methods are not dependent on any type of hierarchical administration (which are quite common in traditional businesses).

In other words, a DAO has no single body in command, no directory board, and, as the name implies, no authority is centralised. DAOs are managed by the collaborative work of its contributors and community members and are run by computer-encoded rules (smart contracts).

While the notion of decentralised organisations (DO) is not novel, the use of smart contracts to automate certain of their functioning procedures and capabilities is what distinguishes DAO as a useful and intriguing concept. Such an innovative framework enables a completely new company model in which various sorts of tasks may be carried out in a completely decentralised and automated manner.

Among the notable use cases for the DAO concept are automated fundraising campaigns (such as ICOs), the issuing of digital tokens and asset tokenization, as well as decision-making and proposal voting systems. Furthermore, the DAO paradigm enables the development of more efficient systems by decreasing the need for human inputs, lowering total operating costs and the hazards associated with human behaviour.

DAOs have the potential to transform a wide number of sectors through the use of decentralised governance models backed by smart contracts, similar to how Bitcoin built a peer-to-peer digital economic system, removing the need for banks and other trusted third parties.