What is DAO and How Does It Work?

What is DAO and How Does It Work?

What is DAO?

DAOs, called “Decentralized Autonomous Organization” are an organization or organization that is governed by voting by their mass community, without being tied to any center. The system is built on computer codes and is still maintained through codes. While its decentralization increases the interest, it has reached a high number of users in a short time.

How DAO Works

The DAO was first announced in April 2016 and started collecting users immediately. Using the Ethereum network, the DAO gets all its usage and power from smart contracts. The purpose of the DAO is to use the decentralized structure through smart contracts and to ensure that the decisions are taken by the crowdsourced structure. The funds required to maintain this structure are made with the tokens in the system.

What is the Purpose of the DAO Project?

Making a financial transaction requires trust, even between individual investors or institutions. Partnerships or transactions on the Internet require much more trust. DAO provides interaction between individuals or institutions through smart contracts to provide this environment of trust. DAO is 100% transparent.

What are the Differences Between DAO and Traditional Organizations?

DAO and Traditional Organizations
  • All kinds of decisions are determined by voting.
  • The result of the voting is automatically activated.
  • All organizations are transparent and open to the public.
  • Projects are checked automatically.
  • Decisions are made by a person or a group of people.
  • The result can be changed.
  • Organizations are confidential and completely non-public.
  • It is controlled manually.

The Future of DAO

DAO draws a very positive graph for the future if it overcomes legal problems. The fact that the community was damaged after the attack showed the power of the DAO that the system recovered in a short time with the studies carried out later.

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