DAO stands for decentralized autonomous organization. It is a way for people to coordinate around shared rules, funds, and decisions using blockchain tools.
How DAOs make decisions
Many DAOs use governance tokens. Members submit proposals and vote on decisions such as funding, protocol changes, partnerships, or community rules.
Why DAOs are used
A DAO can help a project avoid one central owner, at least in theory. Smart contracts can hold funds, record votes, and enforce certain rules publicly.
DAOs can still be messy. Token voting may favor large holders, legal status can be unclear, and poor governance can lead to slow or risky decisions.