What does DAO stand for and its primary function?

What does DAO stand for and its primary function?

• A. Decentralized Application Organization
• B. Decentralized Autonomous Organization
• C. Distributed Algorithmic Operation
• D. Decentralized Approval Organization

Answer: (B)

The term "DAO" stands for Decentralized Autonomous Organization, which accurately captures its essential characteristics. A DAO is an organization represented by rules encoded as a computer program that is transparent, controlled by organization members, and not influenced by a central authority. It operates through smart contracts on a blockchain. The primary function of a DAO is to facilitate decision-making processes and manage resources in a decentralized manner. Members of a DAO typically hold tokens that grant them voting rights, allowing them to collaborate on proposals, allocate funds, or make other critical decisions that affect the organization as a whole. This structure aims to create a more democratic form of governance and encourages participation from all members, ensuring that decisions are made collectively rather than being dictated by a central figure. The other options reflect terms that either do not exist in the blockchain context or mischaracterize the fundamental aspects of what a DAO embodies. Thus, knowing that DAO stands for Decentralized Autonomous Organization provides clarity on its purpose and operational design within the blockchain ecosystem.

The term "DAO" stands for Decentralized Autonomous Organization, which accurately captures its essential characteristics. A DAO is an organization represented by rules encoded as a computer program that is transparent, controlled by organization members, and not influenced by a central authority. It operates through smart contracts on a blockchain.

The primary function of a DAO is to facilitate decision-making processes and manage resources in a decentralized manner. Members of a DAO typically hold tokens that grant them voting rights, allowing them to collaborate on proposals, allocate funds, or make other critical decisions that affect the organization as a whole. This structure aims to create a more democratic form of governance and encourages participation from all members, ensuring that decisions are made collectively rather than being dictated by a central figure.

The other options reflect terms that either do not exist in the blockchain context or mischaracterize the fundamental aspects of what a DAO embodies. Thus, knowing that DAO stands for Decentralized Autonomous Organization provides clarity on its purpose and operational design within the blockchain ecosystem.