What the hell is a Dao?

What is a DAO?

A DAO is ultimately run exclusively by its individual members, who jointly decide on important project issues including technical advancements and treasury allocations.

In general, community members draft recommendations for the protocol’s future operations before gathering to vote on each one. The rules implemented within the smart contract then accept and enforce proposals that reach a certain level of consensus.

Vote(Above)

Voting result (Above)

How does a DAO work?

Through the use of smart contracts, the DAO’s rules are set by a core group of community members. These smart contracts spell out the basic rules of operation for the DAO. They are very clear, easy to verify, and open to public auditing so that any potential member may completely comprehend how the protocol is to work at every stage.

The DAO will need to choose how to acquire financing and provide governance once these rules have been formally recorded on the blockchain.

This is often accomplished through the sale of tokens, which the protocol uses to raise money and fund the DAO treasury.

Holders of tokens receive certain voting rights in exchange for their currency, typically based on their holdings. The DAO can be deployed after funding is finalized.

At this point, the only way to alter the code is to obtain an agreement among the voting members after it has been deployed into production. This means that the community of token holders alone has the right to change the DAO’s rules; no other party is allowed to do so.