In 2021, crypto has been one of the biggest trends shaping tech and finance, and according to mainstream news headlines, decentralized autonomous organizations (DAOs) are set to be a force to be reckoned with in crypto in 2022. Mark Cuban called them the “ultimate combination of capitalism and progressivism.” Yet, while DAOs are relatively easy to understand conceptually, they’re a segment of the crypto market in a state of rapid flux, with many innovative use cases emerging. However, setting up and running a DAO also comes with its own set of unique challenges, which are also changing and developing over time.
The purest definition of a DAO is inherent in the name. An organization is a group of people and entities with a common goal or idea. It’s decentralized, so there is no CEO or board of executives responsible for decision-making, and it’s autonomous, meaning it’s self-governing. Self-governing means that there are governance rules programmed into blockchain-based smart contracts, and members of the DAO vote on matters affecting the DAO according to those rules.
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Read More: The evolution of DAOs and why they are expected to take hold in 2022