What is a DAO (Decentralized Autonomous Organization)


Blockchain has led to the creation of a new type of organization known as DAO. These organizations are collectively operated and owned by their members. Even without knowing each other or having met personally, these members run the organization.

What is a DAO

DAO is the acronym for Decentralized Autonomous Organization. It is a internet native organization where the members own and operate it.

How is a DAO different from a traditional organization?

A traditional organization have structured hierarchy. They hire a talent and pay them wages to deliver on a work.

DAOs are run by its members.

Anyone can contribute to DAOs. To join a DAO you don’t need a fancy degree or access to a good network. You just need to have the required knowledge and can deliver the work. DAOs are open and global. 

DAOs are democratic.

The organization structure of the traditional organization is usually hierarchical. However, DAOs are usually flat and democratic. Unlike traditional organisations, there is no central authority to take decisions. Decisions in DAOs are taken collectively by voting on proposals. It has similarities to traditional organizations in the way teams are formed. But a DAO doesn’t necessarily restrict the reorganisation or stops a member to contribute to another team or DAO.

Governance in DAOs

Done by almost all the DAO members instead of a few from the top. The power is not concentrated around any individual or a group of individuals. DAOs are more democratic than traditional organizations.

Voting is required from the members to implement any changes in a DAO. The outcome of the voting is implemented automatically. In traditional organizations, the decision is taken by the top management. rarely other junior members are a part of the decision. 

For example, a member can propose a certain improvement in the product. The member charges a certain price. Other members can vote on the proposal whether they want the change to be implemented or not.

DAOs are transparent.
Most of the information is publicly available. Anyone can check the financials as well as the decisions taken. DAOs have a set of rules which the members have to abide by. Everyone is accountable and members keep the bad actors in check.

DAOs Incentives

DAOs members are driven by the common goal. They contribute without any formal title. There may not be any financial rewards also. However, more and more DAOs are coming up with their tokens to incentivise their members. These incentives help members work towards a common goal and keep the network safe.

DAO Landscape

The use cases which DAOs can cater to is unlimited. Most common type of DAOs are Protocol DAOs, Social DAOs, Service DAOs, Media DAOs, Collector DAOs.

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Challenges of DAOs

Difficult Onboarding

DAOs can have a steep learning curve for beginners. The Onboarding is not smooth for a majority of the DAOs. There is either too much information which makes it overwhelming or too little information to make it clueless for the beginner.

Attracting and Retaining members

Attracting members to the community is a challenge and retaining them is even a bigger problem. Getting consistent contributors for the DAO is difficult if the incentive and path to achieve the objective are not clear.

Smartcontract Bug

Any changes in the DAOs needs the approval of the majority of members. If there is a bug in the code then it leaves the DAO vulnerable till the members approve and the code is fixed.

Example: A DAO named “The DAO” was hacked and 3.6 million Eth were stolen. 

How to join a DAO?

There is no formal hiring process to join a DAO.

DAOs mostly use discord, telegram, twitter and other similar platforms to communicate with the members and operate. Joining a DAO is as simple as being a part that group.

Once you join the group, on-boarding is done through a set of instructions. These instructions then guide you through the various channels and tasks. It can be quite overwhelming for a beginner. Some DAOs have on-boarding coordinators to ease the process.

Hang out in the group and understand the type of work going on. Decide on the role which you feel you can contribute.

But simply joining the discord group won’t give you complete access to the DAO. To work on various high impact and high rewards projects you to prove your skills to the DAO.

One of the most common ways to get the access is to Complete Bounties

Bounties are the existing to do list of the challenges faced by DAO. You do the task and get rewarded in return. Reward in the form of tokens (or shares of the company).

You can also volunteer to work on a new project which you feel will be beneficial but is not part of the bounty.

So add value to the DAO and level up.


DAOs are still evolving. Strangers now work with each other without even knowing their names. They manage billions and cater to millions of users. They can work at their convenience and work for multiple DAOs as well.

With rapid innovations in the DAO space, traditional organizations can also try blockchain-based governance.

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