A DAO, or decentralized autonomous organization, is a type of organization that is run through rules encoded as computer programs, called smart contracts, on a blockchain network. These rules dictate how the organization operates and how decisions are made, and they are enforced by the network rather than by a central authority. Because DAOs are decentralized, they are often considered to be more transparent, accountable, and resistant to censorship than traditional organizations.
Creating a DAO typically involves the following steps:
It's worth to mention that there are also different platforms that allows you to create DAOs with a more user-friendly interface such as Aragon, MolochDAO, DAOstack and others.
The DAO (Decentralized Autonomous Organization) was a specific type of DAO that was created in 2016 on the Ethereum blockchain. It was designed to be a decentralized venture capital fund, where members could vote on which projects to invest in and share in the profits. It raised over $150 million in a crowdfunding campaign, making it the largest crowdfunding campaign in history at that time. However, it was hacked in June 2016, and a significant portion of the funds were stolen.
The hack prompted a contentious debate within the Ethereum community about how to handle the situation, and ultimately led to a hard fork of the Ethereum blockchain to return the stolen funds to their rightful owners. The incident also led to changes in the way DAOs were designed and implemented, with a greater emphasis on security and risk management. The incident brought attention to the potential legal and technical challenges of decentralized autonomous organization and smart contract risks.