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 have no central owner or point of failure. Operated in the Blockchain or other decentralized protocols it minimizes the chance of corruption, fault tolerance and manipulation.
This protocol could enable more trusted accountability and efficiency by reducing fraud while enhancing security and transparency. This allows also for community-based decision making instead of relying on one central authority. DAOs can make decisions on which data is accurate using its consensus mechanism and once a standard set o rules are in place, most decisions can be automated. Its applications may vary from transactions, payments, and negotiations, but it also distributes value in a marketplace through tokens.