One of the most innovative concepts to have been successfully implemented through the blockchain technology is the introduction of Decentralized Autonomous Organisations or DAOs. Vitalik Buterin, one of the co-founders of Ethereum (ETH), defines a DAO as a “virtual entity that has a certain set of members or shareholders who have the right to spend the entity’s funds and modify its code”, the aim of which is to replicate “the legal trappings of a traditional company or nonprofit but using only cryptographic blockchain technology for enforcement.”

  1. The DAO source code is embedded in a smart contract on a blockchain which specifies the rules for interaction among members, governance, voting powers, etc.
  2. These rules are self-executed without the need for any human intervention.
  3. There is no need for a central governing authority dictating control over the organization.
  4. Properties of the blockchain including transparency, cryptographic security, and decentralization are also inherited by the DAO.

Providing the Road to Regulatory Clarity in the Blockchain Industry.