PROTOCOLS & PLATFORMS

DAO (Decentralized Autonomous Organization)

Definition

A Decentralized Autonomous Organization (DAO) is a blockchain-based organization governed by smart contracts and token holders rather than traditional management structures. Members vote on proposals using governance tokens to make decisions about the protocol's future.

Example

💡 Example

MakerDAO governs the Maker protocol, where MKR token holders vote on stability fees, collateral types, and other protocol parameters.

Risks to Consider

⚠️ Risks
  • Governance attacks
  • Low participation
  • Regulatory uncertainty

Common Questions

Are DAO an ideal of democracy?

Quite the opposite, it is a pure ploutocracy. In most DAOS, 1 token = 1 vote, which leads to a massive concentration of influence into the hands of team members, investors, advisors and early users.

How do I participate in DAO governance?

Hold governance tokens, stay informed about proposals, and vote on decisions that affect the protocol's future.

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