> For the complete documentation index, see [llms.txt](https://square1-hello.gitbook.io/square-1/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://square1-hello.gitbook.io/square-1/decentralized-autonomous-organizations/spectrum-of-decentralized-organizations/dao-concepts.md).

# DAO Concepts

Autonomy and decentralization are important concepts to consider when analyzing DAO systems.

## Autonomy

The extent to which a DAO is autonomous is determined by it's ability to make decisions without specific human interaction. 

## Decentralization 

In general, the decentralization of a DAO increases with time as the network matures. Ultimately this is determined by the amount of entrepreneurial activity and value created at the edges of an organization, rather than inspired by a central leader.

### Sufficient Decentralization

Sufficient decentralization is a concept that the SEC has used to determine whether a digital asset should be classified as a security. While this has yet to be tested in court, there are lawyers who have made theoretical boundaries.

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