DAO is a decentralized autonomous organization owned and managed by community members and automatically enforces rules through smart contracts. 1. It does not have traditional management, and decisions are decided by collective voting; 2. Governance tokens give members the voting rights, and the more tokens, the greater the weight; 3. Proposals are initiated and voted by the community, and will be automatically executed by the smart contract after receiving the majority support. Its core features include decentralization, autonomy and transparency, and all rules and capital flows are open and auditable.

Decentralized autonomous organization (DAO) is a revolutionary form of organization that does not have a traditional hierarchical management structure, but is jointly owned and managed by community members. Its rules are encoded on the blockchain and automatically executed by smart contracts, showing us a more transparent, democratic and efficient future of collaboration.

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What is DAO?

DAO is the abbreviation of Decentralized Autonomous Organization, which means "decentralized autonomous organization". You can think of it as an Internet native company without a CEO and without a board of directors. Its ownership and management are scattered in the hands of all members, and decisions are not decided by a leader, but by collective voting. Its core rules and financial records are recorded on the blockchain, open and transparent, and cannot be tampered with.

Simply put, DAO is a collective driven by code and community consensus, aiming to collaborate and manage resources around a common goal.

How does DAO work?

DAOs operate on several key technologies and concepts that together ensure their decentralized and autonomous nature.

Smart Contracts: The Cornerstone of Organizations

Smart contracts are the "laws" and "charts" of DAO. These codes define how organizations work, such as how proposals are initiated, rules for voting, how to manage funds, etc. Once deployed on the blockchain, these rules are automatically executed without human intervention, ensuring the impartiality and credibility of operations.

Governance Tokens: Symbols of Power and Incentives

To be a member of the DAO and participate in governance, it is often necessary to hold the governance tokens of the organization. These tokens are similar to the “shares” of traditional companies, giving holders the right to vote. Generally speaking, the more tokens you have, the more weight you have in your vote. This mechanism not only enables decentralized decision-making, but also incentivizes members to contribute to the long-term interests of the organization, because the success of the organization will directly increase the value of the token.

Proposals and Votes: Community-driven decision-making

Any member holding a governance token can initiate a proposal, covering everything from project development to modification of DAO rules. All members can then vote on the proposal. If a proposal receives preset majority support (e.g., more than 51% of votes), the smart contract automatically executes the instructions in the proposal, such as allocating funds from the DAO's public vault.

Core features of DAO

What makes DAO unique is its distinctive core features that make it very different from traditional organizations.

Decentralization: Power is not concentrated in the hands of a few people. Every member can participate in governance, avoiding the risk of dictatorship and single point of failure.

Autonomy: The core rules of an organization are automatically executed by smart contracts, reducing the possibility of human error and corruption. DAO can operate like an automatically running machine.

Transparency: All rules, proposals, voting records and capital flows are publicly visible on the blockchain. Anyone can audit the operation of the DAO, which builds a very high level of trust.

Why is DAO important?

DAO is not just a technical concept, it is more likely to lead the transformation of organizational structure.

A more fairer collaboration model: It breaks the limitations of geography and identity. No matter where you are, you can become one of its owners and decision makers as long as you are passionate about a project and contribute.

Higher transparency and efficiency: Many decisions and capital flows in traditional organizations are opaque, and DAO makes everything public, greatly reducing trust costs and internal frictions and improving operational efficiency.

Strong community cohesion: Because members are also owners, they have a strong motivation to work for the success of the organization. This common goal and interest binding can form a vibrant and highly involved community.

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