Decentralized Autonomous Organizations (DAOs) are redefining how groups organize, decide, and act without centralized leadership. DAOs use smart contracts to automate governance, token voting, and fund management. :contentReference[oaicite:6]{index=6}

The DAO Model

A DAO typically issues governance tokens. Holders submit proposals, vote, and execute changes automatically via smart contracts. No central board is needed; rules are encoded. :contentReference[oaicite:7]{index=7}

Strengths

• Transparency: All votes, treasury flows, and changes are on-chain.
• Inclusiveness: Anyone with tokens (or reputation) can contribute.
• Adaptive structures: DAOs can evolve via governance upgrades.

Challenges

• Low voter participation — many token holders do not actively vote. :contentReference[oaicite:8]{index=8}
• Power concentration — large holders can dominate influence.
• Legal ambiguity — DAOs operate in many jurisdictions without clear regulation. :contentReference[oaicite:9]{index=9}

Looking Ahead

Expect hybrid models that blend on-chain voting with off-chain deliberation, reputation systems, and improved governance tooling. DAOs likely will underpin everything from social protocols to decentralized finance to collective ventures across Web3.