Imagine an organization that operates without traditional bosses or offices, where its rules are written in computer code accessible to everyone. This is what a Decentralized Autonomous Organization (DAO) is. Thanks to blockchain technology, DAOs enable people from around the world to collaborate in a transparent and democratic way.
How Do DAOs Work?
DAOs function based on smart contracts—computer programs that automatically execute specific actions when predefined conditions are met. Members of a DAO hold special tokens that grant them voting rights on matters related to the organization. The more tokens you have, the greater your influence on decisions.
Key Features of DAOs:
- No central authority: Decisions are made collectively by all members.
- Transparency: All actions and transactions are publicly accessible thanks to blockchain technology.
- Global reach: Anyone with internet access and the necessary tokens can join a DAO.
Advantages of DAOs
- Democratic governance: Every member has a say in decision-making, proportionate to the number of tokens they hold.
- Transparency: All decisions and transactions are visible to everyone, which builds trust among members.
- Engaged community: People from different parts of the world can collaborate towards common goals.
Challenges and Risks of DAOs
- Technological complexity: To fully participate in a DAO, a basic understanding of cryptocurrencies and blockchain technology is required.
- Security risks: Errors in smart contract code can lead to financial losses or other issues.
- Time-consuming decision-making: The democratic decision-making process can be slower compared to traditional organizations.
Popular DAO Projects (as of August 12, 2025)
Here are some well-known DAOs worth exploring:
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Curve DAO (CRV) A platform specializing in the efficient exchange of stablecoins. Users provide liquidity and, in return, receive a share of the transaction fees. Despite growing competition, Curve, with a TVL of $3.8 billion, still plays a central role in the so-called “Curve Wars”—the competition between DeFi protocols for the highest yields.
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Lido DAO (LDO) The largest liquid staking protocol for ETH and other PoS assets. The LDO token allows holders to participate in decisions regarding the protocol’s development. Currently, nearly 25% of all staked ETH is in Lido, and the organization is actively developing its role in the new trend of restaking.
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Uniswap DAO (UNI) One of the first and still most popular decentralized exchanges (DEX). UNI token holders decide on key protocol parameters. The key topic in recent months has been the “fee switch” proposal, which aims to redistribute a portion of transaction fees directly to UNI token holders and stakers.
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Aave DAO (AAVE) A leading lending protocol where anyone can borrow and lend without intermediaries. The DAO is currently focused on the expansion and stability of its native stablecoin, GHO, as well as its deployment on new Layer 2 (L2) networks, as decided by AAVE token holders.
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MakerDAO (MKR) The system responsible for issuing the decentralized stablecoin DAI. The MKR token is used to govern the system’s risk and DAI’s stabilization parameters. The project is in an advanced phase of implementing its “Endgame” plan, under which the first SubDAOs are being launched, focusing on different asset classes as collateral for DAI.
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Arbitrum DAO The community governing the development of the Arbitrum One network (an L2 for Ethereum). The DAO controls a massive treasury and decides on grants for projects. The “Arbi Grants” program is now fully operational and is funding the first wave of innovative applications in the ecosystem.
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Optimism Collective (OP) The Optimism ecosystem is developing the vision of the “Superchain”—a network of interconnected and interoperable L2s. OP tokens are used to govern ecosystem funds, and the latest round of “RetroPGF” (Retroactive Public Goods Funding) has recently concluded, distributing millions of dollars to deserving projects and developers.
Approximate Prices of DAO Tokens (as of August 12, 2025):
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Curve DAO (CRV): $0.52
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Lido DAO (LDO): $1.85
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Uniswap (UNI): $9.50
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Aave (AAVE): $195.00
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MakerDAO (MKR): $2,250.00
Note: Cryptocurrency prices are highly volatile, and the values provided are for informational purposes only.
Summary
DAOs are an innovative way to organize collaboration between people worldwide without the need for central management. Thanks to blockchain technology, they offer transparency, democratic governance, and global reach. However, before joining a DAO, it’s essential to understand how they work and be aware of potential risks and challenges.
