The term “DAO” or “decentralized self-government” is a familiar term in digital currency literature that you must have heard many times. But your knowledge of this important concept is limited and you may not know anything else. Due to the great importance of Dao in the digital currency world, we have dedicated this article to a full review of it. In this article, you will learn about the nature and workings of the Dao, the benefits of traditional systems and some of the most famous projects, and answers to some common questions you may have about the Dao. Stay with us.

What is DAO?

The first and easiest way to identify the Tao is to refer to its name. DAO stands for Decentralized Autonomous Organization. As the name suggests, a dao is an independent and decentralized organization that is not controlled by a specific person or group. Dao is not a physical organization, but an Internet organization whose members can be users from different parts of the world. In simple definition, Dao is a type of approach to organizational management in which all group members, regardless of rank and position, have the same right to make changes.

DAOs are smart contracts that have mostly been implemented on the Ethereum blockchain, but any blockchain that supports smart contract technology can host DAOs as well. Like the businesses we deal with in the real world, DAOs can serve many different purposes. From decentralized exchanges, to decentralized lending platforms, to the gaming industry, to video and music streaming platforms, to any other group of decentralized, blockchain services, they can all be considered the dao. DAO can be considered as one of the important achievements of decentralized finance (DeFi).


How does Dao work?

The voting rights of users of DAOs are specified by a token called “Governance Token”. Each Dao project has a management token whose owners can participate in the decisions of this Dao. The more control tokens a user has, the more voting rights they have. For example, the Make dao lending platform has two tokens called DAI and Maker. Maker Token is the management token of Maker dao, whose owners can vote on changes in this platform. An important part of the DAO ecosystem is recommendations. Any user who has a suggestion to improve the performance of the DAO can write his suggestion in his network and post it to others.

Other members of the network then vote on the proposal using their administrative tokens. If the proposal is approved by the majority of the members, it will be implemented, and if it does not have the necessary votes, it will be canceled.

What percentage of the approval of the members is required for the proposal to be approved is a matter that may differ from one Dao to another and depends on the rules marked in its smart contract at the beginning.

The most popular projects in the field of Dao

Due to the popularity of digital currency and DeFi in today’s world, the number of DAOs is increasing every day. Some of these DAOs are better known and have many users; while others are new and emerging. In this part of the article, we present and analyze some of the most famous projects in the Dao field.


Uniswap is the largest existing decentralized exchange running on the Ethereum blockchain. In September 2020, this platform released a sovereign token called (UNI). Uni Token holders can have their say on issues such as fees, roadmap and Uni Swap rules.


MakerDAO is a popular digital lending platform among all lending platforms. As we said before. dao has two unique tokens: Die token, which is a stable coin, and Maker token, which is the ruling token of this platform.

3. Aave

Aave is also a peer-to-peer lending platform that allows users to lend or borrow their digital assets without trust between users. The official symbol of the Aave platform is called AAVE. Users of these tokens can express their opinion on important things such as adding new assets, managing the platform and the required support rate.

4.The LAO

LAO is one of the most attractive Dao these days, operating as a venture capital company in America. Of course, the main difference between the LAO and the DAO we mentioned above is that this DAO was created in America and is governed by the laws of that country; But it implemented its functions in the form of smart contracts and decentralized applications.


DAOstack is another attractive DAO, which some people use the description like “operating system with aggregated intelligence” or “WordPress on DAO”. The Dao Stack is an open source software stack designed to support global and interactive networks. This stack can be used to build different DAOs that require group and interactive activities. The dao stack also provides communication tools for all dao running on it.


Aragon is a platform designed as Dao and aims to provide the tools Dao needs. The platform actually supports the creation of DAOs on the Ethereum blockchain and then helps maintain and continue their operations.

The future of the DAO

It is impossible to comment on the future of the DAO with certainty and accuracy. If you have a good understanding of what Dao is and what its features are, you can to some extent know the future of these projects. One of the best technologies in human life today is Web 3.This project is designed to create the necessary platform to reach people and implement all the needs of people’s lives in a decentralized manner. Decentralized Independent Organizations or DAOs can bring traditional projects closer to these conditions. The use of these projects for common activities such as elections and elections, insurance services, film projects etc. also shows that the acceptance of DAO projects is increasing day by day and this will create a bright future for it.


In this article, we have tried to review Decentralized Self-Governing Organizations or Daos in plain language and explain how they work. By reading this article, you must have realized that DAOs use smart contracts as distributed operations; But any established practice is not the Dao.  Any system that would fall into the category of DAOs must take advantage of the “decentralized governance” feature. In particular, the concept of decentralized management is very important in Dao, and therefore management symbols are very important to these organizations.

The decentralized world is progressing day by day, and the tendency towards decentralization is visible in many areas that were previously centrally managed. Perhaps the area of ​​management was one of the areas that we could not think of in a decentralized way; But the rise and popularity of Dao proved us wrong. With these interpretations, we can see the central organization today being replaced by future daos not too far away. Of course, it is only natural that the prerequisites for the realization of such an event are the preparation of daos for this widespread use and the maximum resolution of the problems they may face at this time.

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