Decentralized Autonomous Organization (DAO)
rybindmitriy @ stock.adobe.com
Without hierarchical management, these smart contracts powered by algorithms can autonomously execute decisions based on previously provided information. Different to centralized organizations, based on unified ownership and concentrated power, decentralized organizations are community-led and have no central owner or point of failure. Operated in the Blockchain or other decentralized protocols, it can minimize the chance of corruption, fault tolerance, and manipulation.
This open-source protocol could enable more trusted accountability and efficiency in organizations by reducing fraud while enhancing security and transparency. This also allows for community-based decision-making instead of relying on one central authority. DAOs can make decisions on which data is accurate using its token-based consensus mechanism and once a standard set of rules are in place, most decisions can be automated. DAOs' applications may include investments, crowdfunding, transactions, payments, and negotiations, or even virtual social circles.