DAO

A DAO (Decentralized Autonomous Organization) is a decentralized organization that operates without a central governing body, with decisions made by community members through smart contracts on the blockchain. Participants hold governance tokens that grant them voting rights on key matters, such as budgets, protocol changes, or funding proposals.

DAOs remove the need for intermediaries and traditional hierarchy, ensuring transparency and democratic decision-making. They are widely used in DeFi projects, NFT communities, and investment funds. However, they face challenges such as low voter participation, difficulties in reaching consensus, and the risk of smart contract vulnerabilities, which can lead to financial losses.