A decentralized autonomous organization (DAO) is an organization represented by rules encoded as a computer program that is transparent, controlled by shareholders, and not influenced by a central government. A DAO’s financial transaction record and program rules are maintained on a blockchain.

What is the legal status of a Decentralized Autonomous Organization? The precise legal status of this type of business organization is unclear.

How does it work? Here the members are represented by the address (in Ethereum, It’s Ethereum address). These addresses can be owned by a human, a robot, an IoT device, or even another DAO. Moreover, each member is given a token which represents the shares of the DAO.

Interesting facts

  • The first DAOs were Dash and Bitshares. Others are Digix, Aragon.
  • Since 28 May 2016, the DAO tokens were tradable on various cryptocurrency exchanges.