DAOs & on-chain governance
A DAO is an organization whose rules, treasury, and votes live in smart contracts instead of a legal filing cabinet.
> What a DAO actually is
A Decentralized Autonomous Organization holds funds in a multi-sig or governance contract. Token holders vote on proposals; if a vote passes, the contract executes the action automatically — no board meeting, no wire transfer approval.
> Governance in practice
Most DAOs use token-weighted voting: 1 token = 1 vote. Delegates campaign for votes similar to shareholder proxies. In practice, participation is low and a small number of large holders dominate — governance theatre is a real critique.
> Where they work
DAOs are strongest for protocol treasuries (Uniswap, Aave), grant programs, and open-source funding. They're weakest at anything requiring fast, private, or context-heavy decisions — the on-chain vote loop is slow by design.