Decentralized autonomous organization

This article is about a type of organization. For the former organization that followed this approach, see The DAO (organization).
Not to be confused with Autonomous decentralized system or Autonomous peripheral operation.

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Examples

A decentralized autonomous organization (DAO), sometimes called a decentralized autonomous corporation (DAC),[a][1] is an organization managed in whole or in part by decentralized computer program, with voting and finances handled through a blockchain.[2][3][4] In general terms, DAOs are member-owned communities without centralized leadership.[5][6] The precise legal status of this type of business organization is unclear.[7][8]

A well-known example, intended for venture capital funding, was The DAO, which amassed 3.6 million ether (ETH)—Ethereum's mining reward—then worth more than US$70 million in May 2016, and was hacked and drained of US$50 million in cryptocurrency weeks later.[9] The hack was reversed in the following weeks, and the money restored, via a hard fork of the Ethereum blockchain. Most Ethereum miners and clients switched to the new fork while the original chain became Ethereum Classic.

The governance of DAOs is subject to controversy. As these typically allocate and distribute tokens that grant voting rights, their accumulation may lead to concentration of power.[10]


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  1. ^ Hassan, Samer; De Filippi, Primavera (2021-04-20). "Decentralized Autonomous Organization". Internet Policy Review. 10 (2). doi:10.14763/2021.2.1556. ISSN 2197-6775. S2CID 235559086.
  2. ^ Cite error: The named reference Vigna20150127 was invoked but never defined (see the help page).
  3. ^ Cite error: The named reference Hodson20131120 was invoked but never defined (see the help page).
  4. ^ Cite error: The named reference Economist20160521 was invoked but never defined (see the help page).
  5. ^ Prusty, Narayan (2017-04-27). Building Blockchain Projects. Birmingham, UK: Packt. p. 9. ISBN 978-1-78712533-9.
  6. ^ The Decentralized Autonomous Organization and Governance Issues Regulation of Financial Institutions Journal: Social Science Research Network (SSRN). 5 December 2017.
  7. ^ Cite error: The named reference Popper20160521 was invoked but never defined (see the help page).
  8. ^ Barbereau, Tom; Bodó, Balázs (2023-07-01). "Beyond financial regulation of crypto-asset wallet software: In search of secondary liability". Computer Law & Security Review. 49: 105829. doi:10.1016/j.clsr.2023.105829. ISSN 0267-3649. S2CID 258733922.
  9. ^ Price, Rob (2016-06-17). "Digital currency Ethereum is cratering amid claims of a $50 million hack". Business Insider. Retrieved 2016-06-17.
  10. ^ Barbereau, Tom; Smethurst, Reilly; Papageorgiou, Orestis; Sedlmeir, Johannes; Fridgen, Gilbert (May 2023). "Decentralised Finance's timocratic governance: The distribution and exercise of tokenised voting rights". Technology in Society. 73: 102251. doi:10.1016/j.techsoc.2023.102251. S2CID 258245920.