A decentralized autonomous organization (DAO) is a group organized around a mission that coordinates through a shared set of rules enforced on a blockchain.
A DAO is “decentralized” in that it runs on a blockchain and gives decision-making power to stakeholders instead of executives or board members, and “autonomous” in that it uses smart contracts, which are essentially applications or programs that run on a publicly accessible blockchain and trigger an action if certain conditions are met, without the need for human intervention.
More simply, DAOs are a new way to finance projects, govern communities, and share value. Instead of a top-down hierarchical structure, they use Web3 technology and rapidly evolving governance and incentive systems to distribute decision-making authority and financial rewards. Typically, they do that by issuing tokens based on participation, contribution, and investment. Token holders then have the ability to submit proposals, vote, and share in the upside. (View Highlight)
Note: Decentralized autonomous organization. Governed by a token and smart contracts
Bitcoin is actually a sort of a proto-DAO, a new kind of decentralized equivalent to a traditional company:
Shares ≈ Bitcoin
Shareholders ≈ Bitcoin owners
Employees ≈ Miners and validators
Payroll ≈ Bitcoin rewards for adding blocks to the chain
Marketing ≈ All of those people with laser eyes pumping Bitcoin
But Bitcoin is limited. It’s kind of dumb. It doesn’t really know much, can’t really change itself, and doesn’t really do anything; “it simply exists, and leaves it up to the world to recognize it.” It really is like gold in that it sits there as people do stuff to it and assign value to it. (View Highlight)
