What is DAO?
Last reviewed 2026-05-03
Used by: Lido, Kelp DAO, Curve Finance, Kelp Dao, Arbitrum DAO
Entity coverage: 19 protocols, 0 tokens, 0 chains reference this concept.
A DAO is an organization whose rules and treasury are encoded in smart contracts and governed by token holders. Major DAOs: Uniswap, Aave, MakerDAO/Sky, Arbitrum, Optimism, ENS, Lido. Tools: Snapshot (off-chain voting), Tally, Aragon, Safe.
How it works
Membership and voting power come from a governance token (or an NFT), and holders commonly delegate their votes to active delegates rather than voting on everything themselves.
A proposal moves through a pipeline: a forum post and discussion, an informal temperature check, then a formal proposal — usually requiring the proposer to hold or gather a minimum token threshold. Voting happens off-chain via Snapshot, where gasless signed messages are weighted by token balances at a snapshot block, or on-chain through a Governor-style contract that tallies votes directly. The proposal passes only if it clears both a quorum (minimum participation) and an approval threshold.
For binding on-chain proposals, the approved payload — encoded contract calls to upgrade code, change parameters, or move treasury funds — is queued in a timelock contract. After the mandatory delay, which gives dissenting users time to exit, anyone can trigger execution and the calls run from the DAO's own contracts or its treasury Safe. Some DAOs add a security council with emergency veto powers.
Why it matters
DAOs let token holders coordinate billion-dollar treasuries and parameter decisions without a corporate hierarchy. They are the experimental form of digital-native organizations.
Real-world examples
Uniswap, Aave, MakerDAO/Sky, Optimism Collective, Arbitrum DAO, ENS DAO, Lido DAO, Compound, Gitcoin.
Related terms
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Browse GlossaryFrequently asked questions
What is a DAO in simple terms?
A DAO is an organization whose rules and treasury are encoded in smart contracts and governed by token holders.
Which tools are commonly used by DAOs for voting and treasury management?
Common tools include Snapshot for off-chain voting, Tally, Aragon, and Safe for treasury management.
How does a DAO proposal typically move from idea to execution?
A proposal goes through a forum discussion, an informal temperature check, then a formal proposal requiring a minimum token threshold, followed by off-chain or on-chain voting, and if passed, the approved payload is queued in a timelock contract before execution.