DAO: A Decentralized Autonomous Organization is an organization that is controlled by its members and not subject to the authority of any single individual or entity.

A decentralized autonomous organization, sometimes called a decentralized autonomous corporation, is an organization constructed by rules encoded as a computer program that is often transparent, controlled by the organization’s members, and not influenced by a central government.

Decentralized Autonomous Organization (DAO)

The Decentralized Autonomous Organization (DAO) is a web3 idea that allows communities, corporations, or any type of collective organization to be administered and governed without centralized leadership, thanks to the ability of blockchain. Unlike a traditional corporation or government, they are completely free of hierarchical, top-down structure. Participation in a DAO is usually accessed through the acquisition of a digital token.

  • What Is the Purpose of a DAO? A Decentralized Autonomous Organization DAO is intended to improve the traditional management structure of many companies. Instead of relying on a single individual or small collection of individuals to guide the direction of the entity, a DAO intends to give every member a voice, vote, and opportunity to propose initiatives. A DAO also strives to have strict governance that is dictated by code on a blockchain.
  • What is a DAO in Crypto? Is a type of bottom-up entity structure with no central authority. Members of a DAO own tokens of the DAO, and members can vote on initiatives for the entity. Smart contracts are implemented for the DAO, and the code governing the DAO’s operations are publicly disclosed.
  • What is the most successful DAO? Uniswap is one of the biggest and most popular DAOs and operates as a cryptocurrency exchange built on the Ethereum blockchain. Anyone can become a member by holding the UNI token, which gives voting rights on the way the organization is run and administered.
  • How many DAOs exist today? There are already thousands of different DAOs and nearly 2 million people already hold DAO tokens.
  • How much does it cost to start a DAO? At the moment, the initial filing fee is $100. An annual report is due every year thereafter; the fee for which is a minimum of $60.
  • How to Join a DAO: You need to first buy its cryptocurrency. Holding the asset then generally gives users the power to vote on proposals and updates, proportional to the amount they hold. If you’re interested in joining a DAO, here are some tips to get you started: A beginner’s guide to joining a DAO.
  • Do you need to be a crypto expert or a developer to join a DAO? No, you don’t need to be a crypto expert or a dev. DAOs need people with just about every skill set and knowledge base. For example, many DAOs have writers, graphic designers, marketers, software developers, translators, artists, videographers, community leads, and more.

Most DAOs operate through Discord, so be sure to do your research through Twitter to find out how to join. Additionally, some DAOs have websites or repositories of information that are accessible to the public. Have a look at this list of different types of DAOs.


Decentralized finance, or DeFi, refers to a financial system built upon the blockchain, and therefore fully distributed and not subject to any centralized authority, such as a bank, government agency or financial management firm. Mainly it is an umbrella term for peer-to-peer financial services on public blockchains.

DeFI is making its way into a wide variety of simple and complex financial transactions. It’s powered by decentralized apps called “dapps,” or other programs called “protocols.” Dapps and protocols handle transactions in the two main cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH).

DeFi can address many of the flaws in the existing financial systems, including giving the unbanked access to the financial system. In the coming years, DeFi can offer improved transparency, and more robust security while replacing many of outdated processes.

Centralized VS Decentralized System

Centralized System: is a system controlled and organized according to a hierarchical structure. This means that the power and decision-making authority is concentrated in the hands of a relatively small number of individuals at the top of the hierarchy. Corporations, for example, are centralized systems. A typical centralized blockchain system is the private blockchain since it is governed/managed by a single group or organization. While, obviously, a public blockchain is decentralized on the other hand.

  • Centralized VS Decentralized System: Centralization is the process of concentrating power and authority in the hands of senior management. On the other hand, decentralization refers to the top-down delegation of power and authority to functional-level management.
  • How does blockchain differ from a centralized system? Blockchain is designed to work in a decentralized manner, whereas the databases are always centralized. This unique feature of blockchain gives it the leverage it needs to become the next generation of technology. A blockchain can be either centralized or decentralized. It is important, however, that decentralized not be confused with distributed. While a blockchain is inherently distributed (meaning that many parties hold copies of the ledger), it is not inherently decentralized.
  • What is distributed network in blockchain? Blockchain is a new technology that securely synchronizes the same information across a distributed network of partners, such that all parties see the same thing. This avoids the need for relying on a central intermediary to validate and synchronize information and enables more information symmetry across parties.
  • Centralized vs Decentralized vs Distributed Systems: refer to both individuals and organizations. It affects almost everyone who uses the web. It’s at the core of the development and evolution of networks, financial systems, companies, apps, web services, and more. In a centralized system, control is exerted by just one entity (a person or an enterprise, for example). In a decentralized system, there is no single controlling entity. Instead, control is shared among several independent entities. Distribution refers to differences of location.

For example, if a blockchain is distributed, it can be decentralized. The traditional financial system is highly centralized, but cryptocurrencies are changing that by bringing in decentralization. Bitcoin is the perfect example of a decentralized and distributed blockchain. It has a peer-to-peer network. Bitcoin is regarded as the first decentralized cryptocurrency using blockchain technology to facilitate payments and digital transactions.

  • What is a centralized cryptocurrency? A centralized crypto exchange is one that’s created and run by a company. These exchanges are considered centralized because one company oversees all the transactions and sets the exchange’s rules and fees. For example, Coinbase, Crypto.com, and FTX create and run popular CEXes for a profit.
  • What is the main difference between centralized and decentralized exchange? In short, decentralized exchanges offer lower transaction fees, allow the user to hold their own assets, and avoid a few regulatory burdens. On the other hand, centralized exchanges offer faster transactions, ease of use, high liquidity, and more.
  • Which blockchain is the most decentralized? Many consider Bitcoin to be the most decentralized cryptocurrency. According to “bitnodes.io“, the Bitcoin network has 15,092 active nodes. This is higher than the current number of nodes on the second-largest blockchain network, Ethereum, which stands at 5,873, according to “ethernodes.org“.

Learn more about the Web3

Entering the Web3 era with confidence with this updated Web3 Glossary. Knowing what each term means can save the day when you need a simple explanation for many of the most commonly-used web3 words.

Web3 Glossary Updated by IDEADECO

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