DAO is a concept in the web3 world, it is a kind of organization where people vote to determine whether we should run a function in a smart contract.

To create a DAO, you need to specify at least these things:

  1. The requirements to approve a proposal (a proposal is a question to which you can answer yes or no through voting):
    1. Support proportion: the relative percentage of tokens that are required to vote “Yes” for a proposal to be approved.
    2. Minimum approval proportion: the amount of people you wish to care about each proposal. The percentage of the total token supply that is required to vote “Yes” on a proposal before it can be approved.
    3. The due of a proposal.
    4. So more tokens you own, more important your words are.
  2. The name of your token, and the initial amount of token for you to own.

You can store money (like ether) to this organization, without permission, but if you want to use money, a proposal is needed.

After the proposal is approved, the transaction is made automatically, this behavior is unchangeable, because it is written in the smart contract.

DAO is an acronym of Decentralized Autonomous Organization.

  1. Decentralized means unchangeable, by the way, when you see they word decentralized in web3 world, it mostly means unchangeable.
  2. Autonomous means the organization makes decisions by voting.

If a proposal is not about running a function in a smart contract, then we can’t make sure it will be executed 100%.

That’s why we can define DAO as an organization where people vote to determine whether we should run a function in a smart contract.