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A decentralized autonomous organization (DAO), sometimes called a decentralized autonomous corporation (DAC), is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government, in other words they are member-owned communities without centralized leadership. A DAO's financial transaction record and program rules are maintained on a blockchain. The precise legal status of this type of business organization is unclear.

A well-known example, intended for venture capital funding, was The DAO, which amassed $150 million in crowdfunding in May 2016, and was hacked and drained of US$50 million in cryptocurrency weeks later. The hack was reversed in the following weeks, and the money restored, via a hard fork of the Ethereum blockchain. Most Ethereum miners and clients switched to the new fork while the original chain became Ethereum Classic.[1]


DAO-tooling is a rising need. With functions similar to traditional firms, all DAOs have to balance efficiency and decentralization while running a community, marketing arm, treasury and oftentimes a product. As a result, a slew of DAO tooling services have entered the space[2]

Governance & Voting

Thru voting DAOs maintain transparency and visibility of how their decisions are taken. Once approved, those votes automatically translate to on-chain action (recorded on the blockchain) such as transferring funds from the treasury to an external entity.

On-chain governance tools include Tally, Sybil and Boardroom. However, rising gas prices for on-chain execution has led many DAOs to opt-in on basic polling, using off-chain services boards such as Discord, Discourse and Telegram polls. Token-based signal voting tools such as Snapshot are also favored to capture community sentiment.

Treasury Management

Treasury management is key for the existence of the DAO.

At the moment, the multisig of choice for DAOs is Gnosis Safe, a multi-signature smart contract wallet that allows users to define and limit a list of signers required to confirm a transaction.

The Juicebox protocol also acts as a payment terminal and programmable treasury for projects, allowing DAOs to manage treasury actions such as crowdfunding, employee salaries and automated payouts when a project closes.

Contribution & Compensation

Many individuals contribute to the DAO via moderation, code or “Bounties”. On-chain tasks can be verified by tools such as Rabbit Hole, or off-chain tasks using tools such as Gitcoin and Coinvise. Once the task is completed, many DAOs turn to tools such as POAP or MintGate to provide token-gated assets as a reward or badge to represent credibility.