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What Is A DAO?

Posted on May 30, 2025June 14, 2025 by Brian Colwell

What is a DAO? A DAO is a shared mission, a tool, a compilation of smart contracts, and a decentralized, autonomous, organization. DAOs are both a return to our most ancient forms of collective decision-making and a leap into an entirely new paradigm, at the same time. They remind us that the ways we organize are not fixed laws of nature, but choices—and now we have more choices than ever before.

A DAO Is A Shared Mission

A DAO is a commitment to share value with a community. A DAO is a social group which brings people together and works toward a common purpose. A DAO is a collectively-owned and operated internet-native organization working towards a shared mission that coordinates key governance and resource management decisions through transparent decision-making processes and shared sets of rules enforced on a blockchain.

A DAO Is A Tool 

A DAO is a coordination tool, like any organization. A DAO is a tool for governance and flattening organizational hierarchy, the vehicle by which a Web3 community shares its voice. A DAO is a tool for the collective management of common goods, including cultural and intangible works, natural resources, economic and industrial production, and social systems.

A DAO Is A Compilation Of Smart Contracts

A DAO is a piece of software, at its core. A DAO is an organization whose management is hardcoded directly into a set of smart contracts, or “contracts that enforce themselves”, as put by Vitalik Buterin. A DAO, and its members, are established and governed by rules (permissions) programmed into a compilation of smart contracts (software) on the blockchain that are designed to replicate a company structure and achieve goals without hierarchical management.

A DAO Is A Decentralized, Autonomous Organization

A DAO is automation at the center, humans at the edges. A DAO is an organization that is blockchain-enabled, decentralized, distributed, permissionless, self-governing, and trust-less, a digital entity that “that lives on the internet and exists autonomously, but also heavily relies on hiring individuals to perform certain tasks that the automaton itself cannot do.” – Vitalik Buterin. A DAO is “decentralized” in that it runs on a blockchain and gives decision-making power to stakeholders instead of executives or board members, and “autonomous” in that it uses smart contracts, which are essentially applications or programs that run on a publicly accessible blockchain and trigger an action if certain conditions are met, without the need for human intervention. 

Final Thoughts

DAOs represent a fundamental reimagining of how humans can organize, collaborate, and create value together. They challenge centuries-old assumptions about the need for hierarchical structures and centralized control in organizations. By combining the social aspects of shared purpose with the technological innovation of blockchain and smart contracts, DAOs offer a glimpse into a future where trust is programmed rather than presumed, and where ownership and decision-making are distributed rather than concentrated.

The question isn’t whether DAOs will replace traditional organizations entirely, but rather how these new coordination tools will expand our palette of organizational possibilities.

Thanks for reading!

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