Getting Down To Business With DAOs (Part IV Of IV)

An entirely new model for commerce known as a DAO (pronounced "Dow") has entered the mainstream with the rise of cryptocurrencies. But, as with most data innovations, the laws and regulations governing DAOs are still unclear as lawmakers and the public catch up to learn what exactly DAOs are.

What is a DAO?

DAO stands for "decentralized autonomous organization." It is an entity with  no centralized authority, meaning no board of directors, corporate officers or stockholders. Instead, DAOs are loose associations where "[d]ecisions get made from the bottom-up, governed by a community organized around a specific set of rules enforced on a blockchain."

A DAO is typically affiliated with a specific cryptocurrency or some other digital token, and its members are most often people who own that particular type of token. (In crypto speak, a token is a unit of value stored on a blockchain. For example, any unit of cryptocurrency or any NFT is referred to as a token.)