A decentralized autonomous organization (DAO) is a group operating through blockchain-based smart contract rules to eliminate traditional management structures.

DAOs forego centralized leadership. Instead, they distribute decision-making powers throughout the organization's participants, who hold tokens that grant them voting rights on changes.

Basics of autonomous organizations

In a DAO, decision-making authority is spread among all members instead of a single entity or small cluster. Members often hold cryptocurrencies to participate in how the organization is run — a process referred to as "governance." Cryptocurrencies that are specific to a DAO or protocol and also give the user voting power in the organization are called "governance" tokens. 

Token ownership …