DAO

A decentralized autonomous organization, or DAO, is a group that coordinates through blockchain rules rather than a traditional corporate structure. Members typically hold a governance token, and each token carries voting power. Proposals to spend treasury funds, change protocol parameters, or upgrade code are put to a vote, and the result is executed on-chain.

Most large DeFi protocols are governed this way. Uniswap, Aave, and MakerDAO holders vote on fee settings, new markets, and grants. Treasuries can be substantial, with some DAOs controlling hundreds of millions of dollars in tokens. Voting usually happens through tools such as Snapshot for off-chain signaling and on-chain contracts for binding execution.

DAOs face practical problems. Voter turnout is often low, large holders can dominate decisions, and legal status is unclear in many jurisdictions. Wyoming and a few other places have created legal wrappers for DAOs. The name comes from The DAO, a 2016 Ethereum project that was drained by an exploit and led to the hard fork that created Ethereum Classic.