DAOs Explained: How Decentralised Organisations Work

Decentralised autonomous organisations run via smart contracts and token voting. Here is what they are, how they work, and where they are heading.

A DAO (Decentralised Autonomous Organisation) is an organisation governed by smart contracts and token holder votes rather than a CEO and board. Rules are encoded in code and executed automatically. Major decisions are voted on by token holders, with each token representing one vote.

How a DAO Works in Practice

Famous DAOs in 2026

The Real Limitations of DAOs

DAOs face real challenges: voter apathy (most holders do not vote), plutocracy risk (whales control outcomes), and slow decision-making. The best DAOs have developed timelock mechanisms and emergency councils to work around these limitations while maintaining decentralisation.