A Decentralized Autonomous Organization (DAO) is an organization governed by rules encoded as smart contracts on a blockchain, controlled collectively by its members rather than by centralized leadership. Members typically vote on proposals using governance tokens, with decisions executed automatically by the smart contract code. DAOs are used in DeFi protocols, NFT communities, and investment groups to manage treasuries and make collective decisions transparently.
Example
“MakerDAO token holders voted on a proposal to adjust the DAI stablecoin's stability fee, with the change implemented automatically once the vote passed.”