Decentralized Autonomous Organization (DAO)
A decentralized autonomous organization (DAO) uses blockchain-based systems to decentralize governance decision-making and automate some execution of that decision-making with smart contracts. The term encompasses an array of seemingly disparate projects and groups, ranging from social clubs to investment groups to creative agencies to political organizations and beyond. However, all share a common thread of an attempt to operate as a member-owned organization with the assistance of blockchain-based systems without centralized leadership through blockchain-based systems. In practice, these groups' governance is subject to several issues concerning technical security and social cohesion. The DAO, an ambitious early attempt at creating such an organization, collapsed due to errors in its smart contract code, as an example of such a security concern. Despite its term, few DAOs can be considered autonomous in any significant way and may be better viewed as decentralized organizations (DOs), although this term is not widely used. Furthermore, despite the term, many DAOs have important centralization vectors.