Decentralized Autonomous Organizations
A decentralized autonomous organization, also called DAO is an organization that is run by rules that are created by their members through a consensus process and then written into a set of contracts that are run via computer code, thus enabling the automated management of a distributed organization. On a more technical level, a DAO is an organization that is managed through rules encoded in smart contracts, and run on the blockchain. DAOs are online platform communities, with their resources organized according to rules agreed in advance and set out in its code. DAOs are open source software, capable of modification through member consensus. They are currently made possible by the development of Ethereum. Ethereum is a public blockchain which works as a decentralized virtual machine for executing peer-to-peer contracts. DAOs are essentially a set of complex smart contracts that combine to form a set of rules that manage the operations of a group of members and their resources. Distributed organizations are based on a few core principles to their design which are ultimately trying to support a self-sustaining system of organization through local feedback loops.