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What is a DAO?

When someone says “maybe you should use a DAO” what they mean is that your organization, or team, or project might benefit from the use of DAO software for coordination purposes.

A decentralized autonomous organization (DAO) is a community of people aligned by a common goal where decision making power is distributed and resources are collectively managed.

Here's a breakdown of what each part of a DAO means:

  • Decentralized: Ownership and decision making power is distributed across all members of the DAO.
  • Autonomous: Smart contracts (coded software) enable automation of processes that execute after a proposal is approved by DAO members
  • Organization: A group of people that form a community with a shared purpose and resources that are managed collectively

What is a DAO for?#

Whether you're referring to a group of people using DAO software, or the software itself, the purpose of a DAO is to facilitate coordination.

Treasury management and collective governance are two of the most challenging areas for any organization to implement. DAOs are an exceptional tool for managing these areas, and DAOhaus makes it even easier to get started.

Let's break down what a DAO looks like 👇

A DAO is People#

At DAOhaus we are committed to the concept of “community first” development, so naturally we’re going to start by talking about the people. DAO software works in service of communities of people, and DAOs give those communities coordination superpowers.

So, when you hear someone say “you should join a DAO” what they mean is that you should join a community, team, or project that is using DAO software to coordinate decisions.

A DAO is Software#

DAO software uses Web3 smart contracts to facilitate decentralized decision making among a group of participants. DAOhaus itself uses the Moloch smart contract (more about that soon).

This software allows a DAO to record governance and financial transactions on a blockchain. This means transactions are verifiable and irreversible.


Up Next, learn about DAOhaus: Why Choose DAOhaus?#