CTC: 127 What is DAO

Added: 2026-05-31

[00:00:00]A decentralized autonomous organization, commonly known as DAO, is a blockchain-based system that allows a group of people to make decisions collectively without relying on central authority. In traditional organizations, decisions are typically made through hierarchical structures, where authority flows from top leadership to members.

[00:00:27]These individuals are responsible for guiding the directions of the organization and approving key actions.

[00:00:35]While this structure provides coordination, it also concentrates decision-making power in a limited group of people. In some cases, members or participants may have little influence over how decisions are made, even if they are directly affected by those decisions.

[00:00:53]Blockchain technology introduced a new approach to organizational management. A DAO operates through smart contract deployed on blockchain network, such as Ethereum, where rules and governance processes are encoded into the system.

[00:01:09]Instead of relying on centralized authority, in a DAO, decisions are made through voting mechanisms involving its members. Participants typically hold governance token, which gives them the ability to vote on proposals. These proposals can include decisions related to funding, product development, or changes to the system. When a proposal is submitted, members review and cast their vote. If the proposal meets the required condition, such as a reaching a majority vote, the smart contract automatically executes the decision. For example, imagine a global community managing a digital project through a DAO. A member proposes to allocate funds for development. Other members review the proposal and vote. Once the get a number of votes is reached, the phone is automatically released according to the rules defined in the contract. This process ensures that decisions are transparent, traceable, and collectively approved. DAOs represent a shift from centralized control to community-driven governance, where participants have a direct role in shaping outcomes.

[00:02:21]Understanding DAOs provide insight into how organizations can operate in a decentralized manner within the Web3 ecosystem. So, let me ask you this question. How does a decentralized decision-making in DAO differs from traditional organizational structure? If this video helps you understand DAO, kindly like and subscribe. This content is for educational purposes only and does not include financial, investment, or legal advice. Crypto investment carries significant risk, so always do your own research and consult a qualified advisor before making decisions. Thank you for watching. See you in the next video.