Decoding Decentralized Autonomous Organizations (DAO)

28 Dec. 2020

decentralized autonomous organizations dao main

We learnt about Blockchain Governance and how it is absolutely essential to have governance on any blockchain platforms. We studied how Blockchain’s decentralization feature will be beneficial to build a system that runs in a democratic manner.

By implementing the above it is possible to create an environment that is disciplined, democratized and organized. Decentralized Autonomous Organizations (DAOs) are corporations that are decentralized in nature without having any centralized governing body that does Blockchain Governance.

Let us understand what Decentralized Autonomous Organizations (DAOs) are and how it works.

What is a Decentralized Autonomous Organization (DAO)?

decentralized autonomous organizations dao components

-A decentralized autonomous organization or a DAO is where users on the Blockchain network are owners themselves and are responsible for the rules, regulations made for the transactions.
There is no central authority that governs the users or makes decisions to carry out any transactions.

-In a DAO, the contracts made by the users are written in an executable code format in smart contracts, written in Solidity language.

-Users who have made the rules are also responsible for validating the transactions using consensus-based algorithms.

-These users are called stakeholders or token holders on the Blockchain network. Tokens are given as rewards to these users to motivate them to participate more in validation and affirmation of transactions.

-The more the number of tokens a user owns, the more is their ownership on the DAO.
Until now, most of the Decentralized Autonomous Organizations (DAO) are built on the Ethereum Blockchain.

( is a top offshore blockchain development company in Pune, India.)

How does a Decentralized Autonomous Organization (DAO) work?

decentralized autonomous organizations dao vs centralized

-In a decentralized autonomous organization (DAO), every token holder is entitled to make decisions pertaining to the network. Since there is no hierarchy of people in a DAO, every stakeholder can participate in decision making. Every participation in decision making can earn stakeholder tokens as rewards and elevate their position in the network for taking major decisions.

-In a decentralized autonomous organization (DAO), participants create their own rules and regulations that are stored in smart contracts.

-Every stakeholder in a decentralized autonomous organization (DAO) works independently without having to depend on hierarchies and top level management for any decision or process.

-However, absence of a central body delays a lot of processes in DAO since stakeholders take their own sweet time to reach to a conclusion for issues on the network.

-Also, stakeholders sometimes withdraw their contributions towards the network whenever they feel the need to. This causes unnecessary issues.

(Visit us at to hire blockchain developers. We are an offshore blockchain development company based out of Pune, India)

Live examples of Decentralized Autonomous Organizations (DAO)

Some of the DAOs that have paved the way for more DAOs in the blockchain space are DAOStack, Colony, Aragon etc.

About Blockchain Simplified

Blockchain Simplified is a Top blockchain development company in Pune - India which works on all major Blockchain requirements. We specialise in Blockchain, Web and Mobile development (One Stop Shop for all technology development needs).
Our clientele includes Multiple Funded Start - Ups, SMBs and few MNCs few of which are NASDAQ and NSE listed.

Some of our work includes,

Blockchain based- - is a Live app with 100,000+ downloads, All-in-One Cryptocurrency current account. The entire development from scratch carried out by Blockchain Simplified.

All in one Platform - Complete responsibility of entire software development of the platform ,for a $1m funded blockchain start up, led by a team of serial entrepreneurs and tech veterans in Silicon Valley.

Well funded Blockchain startup - Blockchain Simplified helped a $6m funded American Blockchain startup to build the first blockchain protocol to leverage on-chain smart contracts to manage distributed storage of application data off-chain.

Multinational Bank - The company helped one of the top 3 ranking Multinational Banks to integrate various cryptocurrencies into their banking application.

and more…


SHC - Built entire platform and app from scratch for a $1m funded startup led by a team of Americans including PhD degree holders.

VMW - Developed app for a multi-national company providing mass factory-to-factory shipment services. App is being used by 53 of the Fortune 500 companies such as John Deere, Coca-Cola, Nissan.

and more…


Blockchain Development : Bitcoin, Ethereum, Hyperledger, Corda, and more.
Mobile App Development : Android Native, iOS Native, React Native, Flutter, Xamarin.
UI/UX Design : Strategy, Planning, UI/UX Design, Wireframing, Visual Designs.
Web App Development : Node.JS, Angular, React.JS, PHP.
Backend Development : MongoDB, MySQL, AWS, Firebase.

Visit our official website for more information.