What is DAOs – How They're Changing Organisations

Decentralised Autonomous Organisations (DAOs) are fundamentally reimagining how humans coordinate, raise capital, make collective decisions, and allocate resources replacing corporate hierarchies and legal contracts with transparent smart contract rules and community governance. Understanding DAOs is increasingly important as they manage billions of dollars in collective treasuries and employ thousands of global contributors.

THE RISE OF DAO TREASURIES

Some of the largest DAOs manage extraordinary sums: Uniswap DAO controls over $3 billion in UNI tokens. BitDAO (now Mantle) managed billions in diversified crypto assets. The Ethereum Foundation and Protocol Guild allocate grants to core Ethereum developers. ENS DAO funds the Ethereum Name Service ecosystem. These treasuries rival the operating budgets of mid-sized corporations.

HOW DAOS RAISE CAPITAL

Token Sales: Initial coin offerings (ICOs), IDOs, or Launchpad sales distribute governance tokens to initial investors and community members.
NFT Mints: Some DAOs sell NFT membership passes that grant governance rights Nouns DAO is the most prominent example.
Ongoing Revenue: Protocol-owned liquidity, trading fee revenue (like Uniswap's potential fee switch), and service fees accrue to the DAO treasury.
Grants: Some DAOs receive grants from ecosystem foundations (Ethereum Foundation, Optimism Collective).

HOW DAOS HIRE AND COMPENSATE CONTRIBUTORS

Contributors submit proposals for grants or recurring workstream funding from the DAO treasury. Recognised contributors are elected to sub-committees (legal, marketing, development, grants). Compensation is typically paid in the DAO's native token aligning contributor incentives with protocol success. Global and pseudonymous participation enables talent from anywhere without traditional employment relationships.

REAL DAO CASE STUDIES

ConstitutionDAO: Raised $47M in ETH in a week through viral community mobilisation demonstrating DAOs' ability to rapidly coordinate capital for a specific mission.
PleasrDAO: A collective of DeFi leaders that pools capital to acquire culturally significant NFTs and digital art.
FWB (Friends with Benefits): A social DAO requiring token ownership for community access combining social club, investment collective, and talent network.

Terms in addition to the DAOs – How They're Changing Organisations

Blockchain

A blockchain is a subset of a distributed database. The Bitcoin inventors originally prototyped the system in 2008. This modern database is made up of separate blocks that are connected together in a chronological chain. Blockchains may be used to store a wide range of data types. It has mostly been utilized as a public ledger for bitcoin transactions to date. A peer-to-peer network comprised of independent nodes uses a consensus process to ensure the blockchain's security and legitimacy. Each node in the network keeps a public and immutable copy of the data.

2 Factor Authentication (2FA)

2 Factor Authentication is a security measure with two layers. It is used by the majority of cryptocurrency exchanges. To log in, you must provide not only a password, but also a code obtained, for example, from the Google authenticator.

Airdrop

An airdrop is a method of distributing coins. End users can typically obtain coins for free or in exchange for doing a small task, such as subscribing to a newsletter, sending a tweet, or inviting others via a personal affiliate link. Cryptocurrency airdrops — the act of depositing cryptocurrency into public crypto wallets — are utilized as a marketing, liquidity creation, and network bootstrapping technique for many different types of blockchain initiatives.

Altcoin

Altcoin - "alternative coin" - is any kind of digital currency other than Bitcoin. Since the launch of Bitcoin, the world's first digital currency, many altcoins (as well as supporting blockchains) have been created. Altcoin digital currencies share many similarities to Bitcoin, but consistently and have significant differences. There are about 20,000 altcoins, and this number is expected to grow significantly in the coming years. Altcoins often develop Bitcoin features. Ethereum, currently the most widely used blockchain, supports digital contracts and separate applications where Bitcoin does not. Altcoins are also often created to cater to the needs of different users. The Litecoin blockchain, for example, can process payments quarterly for the duration of Bitcoin.

Cold Storage

Cold storage is the way to store cryptocurrency offline. The word refers to the use of offline wallets that are not connected to the internet. Cold storage is the most secure way to keep cryptocurrencies since an offline currency becomes less likely to be hacked and stolen. Paper wallets, printed renditions of private keys, and offline hardware and software wallets are all examples of cold storage.