What is DAO?

Blog DAO 2

Are you wondering what DAO is? What is its purpose, and what sets it apart from other organizations? Would you like to learn more about its benefits for investors? We invite you to read the article, where you will find the answers to these questions!

What exactly is DAO?

DAO means Decentralized Autonomous Organization. You can imagine it as a flat structure company devoid of hierarchy. Every member is equal and has the same rights. There are no directors, accountants, or financial brokers, and no one affects the community’s decision process. In this context, the word “autonomous” means the full right to decide about the development destination by users. It is going on individually established rules internally in the company.

Purpose of working

When you have already learned about that specific organization, you may wonder why it was created. DAO conducts a collective business decided by the will of the group. The main idea is to create a place where collective knowledge, equality, and operating transparency will be the most significant values. At the core of the concept is the theory that aggregated expertise and management of many investors with equitable rights will achieve success much more effectively than power concentrated in the hands of one person, who may be mistaken. Elimination of the superior entities and all the brokers provides the safety transaction and the lack of errors that result from human nature, such as wasting funds, creative accounting, or taking bribes.

How DAO works?

DAO is based on the operation of open source code, which is available and verifiable to anyone. It means that you don’t have to trust the people you work with via the Internet at all. The organization provides all the safety. If there is a bug in the code, the public decides about the following steps by voting (51% must choose an option). The environment functioning requires a rewarding system. It is implemented through a token that has a particular value. Its holding entitles you to vote, so no one outside the organization can influence the process.


The main pros of DAO undoubtedly are: realizing the idea of equality and democracy and the whole working model without the unnecessary agents. It prevents mistakes that could result from human greed or lack of knowledge. Collective knowledge can be the key to the success of a properly designed project. DAO provides an interesting counterbalance to the schemes of organizations that have worked in the world so far. DAO’s working system is so safe that it could secure, for example, presidential elections, which could be an exciting solution for the future.


DAO is a fascinating concept in organizational and ideological terms. It goes against the typical, classic organizational and decision-making systems. Human mistakes are eliminated on the structural level, which means that the system construction won’t allow you to make them. It is an excellent chance for the development of democracy. DAO solutions could be applied to modern business management or politics. It is an excellent idea for everyone who values anonymity, decentralization of government, and business automation.