What is a decentralized autonomous organization (DAO)?

A Decentralized Autonomous Organization (DAO) is a type of organization that operates on blockchain technology, where decision-making is distributed and managed by smart contracts and community consensus rather than by a central authority. DAOs are designed to function in a transparent and democratic manner, with participants voting on proposals that affect the organization. The governance of a DAO is typically carried out using cryptocurrency tokens, where token holders have voting power proportional to their holdings. DAOs are often used for decentralized projects in areas such as finance (DeFi), governance, and funding, as they offer a decentralized model of management that is resistant to censorship and centralized control.