Academy > Intro to DeFi

Decentralized Autonomous Organisations

DAO is an acronym that stands for “Decentralized Autonomous Organisation.”

Many communities and projects in crypto claim to be a DAO. Let’s unpack those three components.


First, it should be noted that “decentralization” comes in degrees. For example, if two people both have access to a wallet, the account is decentralized in the sense that both people share decision-making power. The more people involved in sharing the responsibility, the more relatively decentralized it will be.

Most DAOs give their members either a proportional or equal distribution of decision-making power. For example, members might be given votes or might be able to delegate them. In some way or another, their governance is shared, meaning there is more than just one decision-maker. 


Autonomous financial activity happens automatically. For example, a DAO might give roles to its members, and some amount of operations will happen on the blockchain through smart contracts or other programmed, trustless code. This complex step incentivizes DAO members to participate in defining and carrying out the goals of the DAO. 


DAOs are everywhere in crypto, and it is easy to find yourself among several. Simply by holding tokens, you can become a member of some DAOs. For example, MakerDAO, the creators of DAI stablecoin, is governed by holders of the MKR token. Some of their recent proposals led to tokenizing real-world assets for the crypto markets, but they had to pass governance votes first. Other DAOs have specific goals and are formed around investment, pooling funds, or building a community of like-minded people. PleasrDAO, for example, pools funds and votes to acquire valuable NFTs, which are collectively shared amongst its members.  

When seeking out these organizations, whether to be a part of a community or seeking some financial gain (or both), be sure to find a DAO that has a supportive and active community, helps you achieve your financial goals, and offers you a chance to participate in the growth of web3.

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