Decentralized Autonomous Organization (DAO)

The abbreviation DAO represents Decentralized Autonomous Organization. By and large, a DAO is a system of hard-coded rules that characterize which moves a decentralized organization will initiate. Nonetheless, the term DAO may likewise allude explicitly to an organization called "The DAO," which was conceptualized on the Ethereum blockchain, back in 2016.
Basically, a DAO alludes to a specific sort of organization that, in contrast to conventional companies, depends on open source code and is worked completely by its community. In this manner, the underlying structure and working systems of a DAO are not in light of any sort of hierarchical management (which are very common in traditional businesses).
All in all, a DAO has no single entity in charge, nor any directory board and, as the name recommends, there is no centralization of power. DAOs are directed by computer-encoded rules (smart contracts) and are administered by the collective work of its contributors and community individuals.
While decentralized organizations (DO) isn't new, utilizing smart contracts to automate a portion of their working components and functionalities makes DAO a helpful and intriguing concept. Such a creative structure considers a whole new model of business, where different types of activities can be executed in a totally decentralized and automated way.
A couple of vital use situations where the DAO model might be helpful incorporate automated raising support crusades (like ICOs), the issuance of digital tokens and tokenization of assets, as well as independent direction and proposal voting systems. Likewise, the DAO model empowers the creation of additional efficient systems by lessening the requirement for human inputs, which thusly decreases the overall operational costs and the risks connected with human behavior.
Just like the manner by which Bitcoin made a peer-to-peer digital economic system, wiping out the requirement for banks and other believed outsiders, DAOs can possibly change many industries using decentralized governance models powered by smart contracts.