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Introduction to DAOs
ADAO or decentralised autonomous organisation is a system ofcoded rules that determine the actions a decentralised organisation willtake.
In simpler terms,a DAO is a certain type of organisation that is based on open-sourcecode and is run by its community. So, unlike traditional companies,the basic structure of a DAO is not based on any form of hierarchicalmanagement. A DAO has no centralised ruling power.
Instead, DAOs followcomputer-coded rules (or smart contracts) and are collectively governed bytheir community members. This means that control is shared amongparticipants. Participants usually use governance tokens to vote ondecisions made by the DAO.
DAOs offer useful models forfundraising campaigns like ICOs, the tokenisation of assets, in decision makingand voting systems.
The concept ofa DAO is an innovative structure that enables an entirely newbusiness model, where activities can be completed in a completely automated,transparent, and decentralised way. A DAO is as close as a projectcan get to being a true democracy.
What was the DAO?
The DAO was thefirst example of a decentralised autonomous organisation. Slock.itcreated the DAO to operate as a venture fund platform forcrypto projects. However, the project never got off the ground.
In June 2016, a hackerexploited a few lines of code and moved 3.6 million ETH ($70 million). However,the funds were moved to an account subject to a 28 day holding period so thehacker could not complete their getaway. To refund themoney, the DAO re-wrote the blockchain. The hack was thebeginning of the end for the DAO.
