DAO foundations
A DAO uses smart contracts, tokens and proposals to coordinate a group without relying on one central management team.
The code defines some rules, but participants still need social processes for interpretation, communication and conflict resolution.
Governance tokens
Tokens can grant voting power, proposal rights or economic participation in a protocol treasury.
Token voting is not automatically democratic: concentration, delegation, voter apathy and low participation can heavily influence outcomes.
Treasuries and proposals
A DAO may use its treasury to fund development, grants, liquidity programs or operating expenses.
Good governance makes proposals specific, exposes trade-offs and gives voters enough time and information to evaluate execution risk.
Coordination risks
Smart contracts can automate decisions, but bugs, rushed votes and unclear authority can still cause losses.
The strongest DAOs combine transparent code with accountable contributors, security reviews and well-defined emergency procedures.