How Does a Decentralized Autonomous Organization (DAO) Work?

A DAO operates without central leadership, using smart contracts on a blockchain to enforce its rules. Members, typically holders of the DAO's cryptocurrency token, vote on proposals to make decisions collectively.

This structure allows for transparent, automated, and member-owned governance. All transactions and rules are recorded on a public ledger, making them auditable by anyone.

DAOs are funded through token issuance and manage their own treasuries.