What are DAOs?

DAOs are an effective and safe way to work with like-minded people around the globe. Essentially, they’re safe ways to collaborate with strangers and commit funds to a specific cause. You can think of DAOs as magic internet organizations that’re collectively owned and managed by its members.

The backbone of a DAO is the smart contract. The contract defines the rules of the organisation and holds the group's treasury. Once the contract is live, no one can change the rules except by a vote. If anyone tries to do something that's not covered by the rules and logic in the code, it will fail.

This means that DAOs don't need a central authority, which is their biggest superpower. Instead, the group makes decisions collectively via votes and the execution of those votes are authorised automatically when a vote passes. This means that there is no need for human handling and that error and that fraudulent or malicious manipulation is severely minimised.

DAOs differ from traditional organisations in many ways, but the most noticeable is that they’re usually flat and fully democratised instead of hierarchical. This is different from traditional organisations because they usually have a sole decision maker. DAOs are also fully transparent and public instead of private with certain information limited to executives and managers.

The concept of DAOs are extremely exciting as they promise to revolutionize organizational structure as we know it. DAOs solve almost everything that’s wrong with how modern day organisations are run. A perfectly structured DAO gives every member the opportunity to shape the organisation, which can help shape an entire industry.