DAO - Features

The rules of the DAO are established by a core team of community members through the use of smart contracts. These smart contracts lay out the foundational framework by which the DAO is to operate. It enables people to self-govern their community without facing bureaucracy

• Once these rules are formally written onto the blockchain, the next step is around funding: the DAO needs to figure out how to receive funding and how to bestow governance often achieved through token issuance, by which the protocol sells tokens to raise funds and fill the DAO treasury.

• DAO’s financial transactions and rules are recorded on a blockchain making transactions transparent and verifiable

• They are highly visible, verifiable, and publicly auditable so any potential member can fully understand how the protocol is to function at every step.

• Does not require a central governing authority imposing control over the organisation since token holders are given certain voting rights, usually proportional to their holdings.

• The requirement to involve a third party in a financial transaction is eliminated.

• Transactions are simplified through Smart contracts (represents the rules of the organisation).

• The rules cannot be edited not including people noticing, because DAOs are transparent and often public.

• Modification of the rules of a DAO cannot be done by any authority and it can only be modified by the community of token holders through a new proposal.

Good to know: Joining a DAO is similar to joining the DAO’s community, which is often hosted on Discord or Telegram. To properly become a member of an existing DAO, you must make a membership proposal offering digital tokens in exchange for DAO membership tokens at a loosely predefined exchange rate.