What’s a Decentralized Autonomous Organization?

A 2-minutes explainer

Cryptocurrencies and Non-Fungible Tokens (NFTs) are symptoms of a traditional system that failed to deliver on its promises. Proponents of these technologies see them as cultural shifts and have coalesced into online communities embracing transparency and decentralization.

These communities shouldn’t replicate current organizations. That wouldn’t be in line with Web3’s ethos. They must be decentralized and on-chain⛓️ to reflect a crypto-society that seeks to become mainstream. And thus were born Decentralized Autonomous Organizations, or DAOs.

The tech community has a habit of making simple concepts difficult. This needn’t be the case. In short, DAOs are how humans come together as a group🧑‍🤝‍🧑 to make decisions in the digital world🌎. They do so with the help of two key tools…

• Rules that govern the organization are expressed as “IF/THEN” statements, coded directly into a blockchain (rendering them auditable and permanent).
• Voting shares are issued to stakeholders in the form of “digital governance tokens” — also recorded on a blockchain

Working this way replaces the legal mumbo-jumbo of today’s organizations (rules are coded) and their hierarchical nature (everyone has a voice). Many work…