Definition of DAO
Blockchain France defines a DAO (Decentralized Autonomous Organization) as a decentralized organisation whose rules of governance are automated and immutably and transparently recorded in a blockchain.
A DAO is controlled by computational algorithms that are smart contracts, which determine the rules between the parties involved.
A DAO has no nationality and no borders.
How does a DAO work?
A DAO operates on a blockchain, which ensures transparency, immutability, autonomy and security. Its transparency ensures that the rules are well defined and that decisions are voted on by the community (voting share according to the number of tokens held).
Thus, the money collected by the DAO cannot be spent without the agreement of its community members.
A DAO is based on open source code, i.e. the code is visible to anyone who has the contract address.
Examples of DAOs
– The DAO created in 2016 is intended to fund projects to contribute to the development of the Ethereum protocol.
– Aragon created in 2016 is a project followed by Coinhouse, this open source software proposes a new way to manage companies and projects using the advantages of the Ethereum blockchain.
– Nexus Mutual created in 2016 is an Ethereum-based platform that designs insurance products.