Smart contracts and blockchain are governance technologies that have the ability to increase openness while reducing bureaucracy through self-enforcing code. They can help companies reduce current principal-agent problems and the moral risks that come with them. In the absence of third parties, distributed network tokens enable incentives to automatically align interests.

DAOs address a long-standing governance issue known as the principal-agent dilemma by centralized autonomous organizations. So the question is: what is a DAO and how is it different from a traditional organization?

DAO Meaning Crypto: What Is a DAO?

A decentralized autonomous organization (DAO) is a blockchain-based program functioning as a capital fund, based on open-source code and lacking a traditional management structure or board of directors.

It provides users with a built-in methodology for collectively managing its code.

In simpler terms, a DAO is a self-organizing, decentralized organization. The DAO is not affiliated with any single nation-state in order to be totally decentralized, albeit using the Ethereum network.

Example Of Decentralized Autonomous Organization

Even though DAOs are still in their development stage, many of them exist now. Some of the examples of decentralized autonomous organizations are:

• DASH: A cryptocurrency administered by its users
• MakerDAO: A program that maintains a stablecoin
• Augur: A prediction market platform

Now that we have answered what is a DAO, let’s jump to our next question: how does a decentralized autonomous organization work?  .. go to full length article at ZenLedger.