5.Governance with Autonomy: Decentralized Autonomous Organization (DAO)
Channel: Rafiq Bouhsen
Date: 2021-07-21

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Source:
EDX
LinuxFoundationX LFS170x
Blockchain: Understanding Its Uses and Implications
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A) Decentralized Autonomous Organization (DAO)

Decentralized Autonomous Organization (DAO) is a complex stack of smart contracts.

It’s important to understand that, at the moment, there is no such thing as a completely autonomous DAO. There are specific parts that are autonomous and others that are not so autonomous.

In simple terms, a DAO is an organization that runs on a stack of computer programs (called smart contracts in the blockchain world) that are all interconnected to maintain a set of pre-programmed rules that have been previously voted upon by a community.

When thinking about regular corporations stripped all the way down to their bare bones, they are basically different groups following rules, responsibilities, and duties given from those sitting at the top of the organization. The bigger they are, the more complex these pieces become. At the moment, a DAO's goal is to automate this complex system piece by piece.

Within each DAO, there is a kind of pooling process for humans to contribute new rules into the system. These rules are then presented to the community and voted upon, based on the DAOs previously created rules. These new rule commitments will need majority agreement (may be different for each DAO) from the community to make this rule real. If this new computer-coded rule is accepted by the community, then it will be placed into the stack of other computer coded rules to improve the overall autonomous organization.