What is DAO in blockchain?

 Creating a safe environment for all like-minded people to work together is the greatest challenge and the concept of DAO makes it easy.

Unaware about DAOs? , swipe down to know about DAO & its significance.

Without any delay, let's dive deep into the article.

What Are DAOs?

DAOs are a new path that creates an effective & safe space for all like-minded people around the world to work together.

DAO - Decentralized Autonomous Organization

A DAO is a community-led entity that is completely autonomous & transparent with the presence of no central authority.

In DAO, the smart contracts lay the foundational rules, execute based on the decisions, and at any point, voting, proposals & code can be publicly audited. In turn, a DAO is wholly governed by individuals who make critical decisions about the future of the projects which includes upgrades along with treasury allocations.

How Does DAO Work?

The rules of DAO are written by the community members of the core team with the use of smart contracts. These smart contracts hold the foundational framework through which DAO operates. 

These smart contracts are visible, verifiable, and publicly auditable which helps anyone in the community to completely understand the function of each protocol on every step.

When the rules are written on the blockchain, the next step is to collect funds. The DAO needs to know the receiving of funds & bestow governance.

This is usually achieved via token issuance, through which the protocol sells tokens for raising funds and fills the DAO treasury.

For the given fiat, the token holders receive certain voting rights proportional to their holdings. After the completion of funding, the DAO is ready for deployment.

At this stage, the code is pushed into production, it will no longer be changed by anyone other than a consensus reached via voting. This implies that no special authority can change the rules of DAO & this is up to the community of token holders to decide.

Why Do We Need DAOs?

Launching an organization with someone who involves funding & money needs a lot of trust in the people that you decided to work with. Trusting someone who ever interacted with the internet is very hard. With DAOs, when you start an organization, you don't have to trust anyone in the group. Since DAO's code is completely transparent & verifiable by anyone.

Thus, this DAO creates a new way for global collaboration & coordination.

Need to know more about DAO, then read Bitdeal - Leading Metaverse Development Company recent blog, What is DAO, Decentralized Autonomous Organization