DAO Overview

What is a DAO?

A "DAO" refers to the systems organizing a dispersed group of participating agents or nodes (may be humans, computers, or entities). These systems leverage cryptocurrency, smart contracts, and token systems to manage resources and make decisions.


General features DAOs exhibit include:

  1. A membership or participation system

  2. Resources controlled via code or member action

The nuances of the systems defining both 1. and 2. vary widely due to the rapid advancement of new applications and the way entrepreneurs, academics, software engineers, and investors leverage the technology in the ecosystems they participate in.

The difference between a DAO and a Token Economy

All token economies may be considered DAOs because token economies satisfy both features mentioned above (1. membership is defined by token owners, and 2. those token owners control their portion of the network).

On the other hand, many DAOs do not use a liquid token economy to function. These types of DAOs typically function as a reserve of resources managed via some form of voting system.

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