Section 8 // ●●●●●●●○ Level: Easy Quick Links: 4: Wallets | 5: Tokens | 6: NFTs | 7: DeFi Dashboard: Web3 Starter Pack |

<aside> 🥡 KEY TAKEAWAY Decentralized autonomous organizations (DAOs) are non-hierarchical community-led organizations operating on the blockchain technology.

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What are DAOs?

DAOs is abbreviation of decentralized autonomous organizations which are non-hierarchical communities that share the same vision and goal by operating on the blockchain.

In the background, DAO is a software that runs on the blockchain and offers its users a built-in model for collective code management.

What is the difference between traditional organizations and DAOs?

Traditional organizations are managed by a limited group such as boards and executives. DAOs are governed by rules written in the code and enforced by the use of a smart contract.

DAOs represent the decentralized way of building and operating a business by highlighting transparency and community trust.

Types of DAOs

• Protocol DAOs
• Collector DAOs
• Social DAOs
• Philanthropy DAOs
• Venture or Investment DAOs
• Media DAOs

How to join a DAO?

In order to become a member of a DAO, the user first needs to by the DAO’s cryptocurrency, usually in a form of a governance tokens (membership cards in real-world). Some DAOs may even include an application process for a user to join. When the user holds the asset and engages in the community, the power can be used to vote on updates and proposal, proportional to the amount hold in tokens.

If not satisfied with the particular DAO, user can sell the tokens and stop the membership.