There are a lot of terminologies and technical jargon around the world of blockchain technology. Although most of us ar enow familiar with NFTs, and the market of Cryptocurrency – there is a lot to be explored. There are terms like DeFi, Digital wallets, Mining that still need to be understood clearly. One such thing is DAOs. DAOs stand for Decentralised Autonomous Organizations.
What are DAOs?
The very term of DAO – Decentralised Autonomous Oragnizations – gives away its essence. These are organizations that are unlike the traditional ones. These are decentralised and anonymous – categorizing these with Blockchain. So, DAO is basically a computer code – binding contracts – based on blockchain philosophy.
How DAOs operate?
There are three steps to be noted. The initial step is the creation of the smart contract. This contract holds valid like any other paper-based contract. Following this, there is a discussion and declaration of a pathway for funding and governance. These are usually supported by a token – many oragnizations create their own tokens. The final step is to deploy the set DAO on the blockchain. With this step, the organization becomes valid and ready to function.
A popular way of DAO is crowdfunding. Crowdfunding is not a new concept – only blockchain technology is a recent addition to it. Herein the members are given tokens in exchange. These tokens give power to the holders – they have a say in decision-making and analysis. There are many major players and names coming in this section.
Such organizations are focusing on more effective leadership and efficient working systems. There are, no doubt, risks of security and future uncertainty. But for now, DAOs seem to have picked the brighter side of growth.