The Insurgence Of Decentralized Autonomous Organisation(DAO) In Blockchain

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The Bitcoin launch brought the Blockchain technology to the spotlight. Ever since, many innovations have been streaming from Blockchain to effectuate and automate operations. 

With this in effect, the reliance on humans to complete the tasks is taking a back seat. This is because Smart contracts take up the job of executing transactions by taking the instructions from their coded program. It is always advisable to do the smart contract security auditing before proceeding for any smart contracts.

Now comes the Decentralized Autonomous Organisation(DAO), an added addition to advancing the blockchain technology by extending the governance rights to its community members. Want to know the catch of the concept?

Let’s take a deep dive into DAO, its formulation and functioning on the blockchain, and so on in this article. Ready for the ride? Then, let’s just get started!

DAO – Explained

DAO, otherwise known as Decentralized Autonomous Organisations, is a programmable function wherein the rules are coded in the contract that runs on the blockchain network. DAO Smart contracts are shared among the group of a like-minded community who work collectively toward the DAOs mission. They hold the voting rights to take part in the platform’s decision-making. 

For instance, if a crypto project wants to get listed for crowd-funding, the community members vote their opinion for approval. With the collective consent of the members, on receiving the maximum votes, the project is qualified for crowd-funding. 

In short, there are no central bodies that govern the platform, but the group of community members holds the authority and governance rights on the improvisations or decision-making.

The DAO – How It All Started?

“The DAO” originally came into existence in 2016. The Ethereum community created it, intending for venture capital funding of the DeFi and crypto projects. Investors can stake their Ethereum tokens to obtain DAO and become a part of it. Surprisingly, 12.7 million Ether was accumulated in the DAO, and the project started to flourish. 

The DAO token holders are accredited with governance rights. And so, if a project wants to raise funds, the investors can vote on getting them listed. Based on the project’s success, the profits are shared among the token holders.

The Downfall Of “the DAO”

The DAO crypto was all doing good until a hacker attacked the DAO and drained Ether by exploiting the loophole in the code resulting in a loss of 3.6 million ETH. The Etherum community members then took control of it and hard forked the Ethereum blockchain. Thats’ when the blockchain was split into Ethereum Classic and Ethereum.

The funds were then credited to the investor account, and DAO has been nothing less of a failure. The fact that DAO is an open-source code helped the preceding organization adopt the DAO code by improvising and strengthening the shortfalls.

How Is DAO Web3 Different From Centralized Initiatives?

Companies functioning based on centralized bodies rely on the decision-making of the authoritative bodies and are not majorly influenced by equity shareholders. If the investor wants to have a say in the decisions, there is no scope. 

Whereas DAO brings in democracy in the management and operations with the sole governance rights lying with the token holders. Let’s look at how web3 DAO differs from centralized entities. 

  • DAOs are structured with predefined rules coded in the Smart Contract. Smart contracts comply with the set of instructions to carry on the functioning and that which cannot be intervened or modified by humans. 


  • DAOs perform based on program code while central institutions follow the country’s regulations. 

How does DAO In Crypto work?

DAO is influential across various sectors such as investment, DAO in NFT, fundraising, and so on. So, let’s walk in and find out how the work flows in DAO. 

DAO – On the making: As discussed earlier, DAO uses Smart contracts wherein all the ground rules about its operations are laid. Since there is no central body, they are created with such strength and security, clearly defining the functionalities to work autonomously. 

Investing in DAO: The DAO can be acquired by the investors by buying the DAO native tokens, which are cryptocurrencies. The investor’s voting rights are proportional to the number of DAO tokens they hold, which gives them the power to shape the platform. 

Hold voting rights: The token holders can vote on every single decision of the platform. The activities performed solely depend on the community member’s voting for implementing the proposals. The highest privilege a DAO token holder inherits. 

Looking Into The Benefits Of A Decentralized Autonomous Organization…


  • The investors needn’t be upset with the decision-making of anybody else as they get to have a say and accountability in the platform’s growth. 


  • Decentralization keeps the operations completely transparent. This way, it can be ensured the decisions are rightly carried out in the Decentralized Autonomous Organizations. 


  • The token holders possess complete ownership of the maintenance, eliminating the need for third parties and related costs. 


  • Also, holding a DAO token can be compared to having an equity share- so as the project grows, the profits are distributed among the token holders.

Spread Out Of Top-Performing DAO

Having got a comprehensive insight on DAOs, let’s watch out for some of the esteemed ones in the market. 

DAO Protocols Token Name
Uniswap DAO  UNI
Compound COMP
Decred DCR
SushiSwap SUSHI
Synthetix DAOs SNX


On An Endnote

DAO crypto are bringing a new phase of governance in a decentralized ecosystem. Besides providing the decision-making rights, the token holders are equally rewarded. And that explicitly implies the promising returns on investing in DAO. 

As DAO is intended to perform autonomously, care should be taken care at ground level to instill a safe code. Certain errors might be overlooked at the time of development, which will be rightly caught in the auditing process. 

Thus, to ensure secure implementation, you can always approach QuillAudits, as It has vast experience in providing the auditing services your DAO Smart contracts deserve.

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