How Does the Howey Test Apply to Decentralized Autonomous Organizations (DAOs)?

The application to DAOs is complex. If a DAO is truly decentralized, with active governance participation from a wide, dispersed token holder base, it may fail the 'efforts of others' prong.

However, if a small group of founders or a central team retains significant control, or if the token is marketed with an expectation of profit from the team's efforts, the DAO token is likely a security. The key is the degree of decentralization and active participation.