DAO (Decentralized Autonomous Organization)
An organization run by code and community vote, not management
Definition
A Decentralized Autonomous Organization (DAO) is an organization governed by rules encoded in smart contracts on a blockchain, with no central authority. Decisions are made by token holders who vote on proposals. DAOs can manage treasuries, direct protocol upgrades, fund grants, and make operational decisions collectively. The rules are transparent and enforced automatically by code.
Example
MakerDAO governs the DAI stablecoin system. MKR token holders vote on parameters like stability fees (interest rates), collateral types accepted, and liquidation ratios. A proposal to add a new collateral type (e.g., treasury bonds) requires a vote. If 50%+ of voting MKR approves, the change is automatically executed by the smart contract — no CEO, no board, no legal entity.
Related Terms
Frequently Asked Question
What is a DAO?
A DAO is an organization governed by smart contracts and token voting, with no central authority. Decisions, treasury management, and protocol changes happen through on-chain governance votes.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.