What is DAO? The reason why Decentralized Autonomous Organizations are changing the Practical Blockchain industry.

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**What is a DAO (Decentralized Autonomous Organization)**DAO stands for Decentralized Autonomous Organization, which can be directly translated as "分散型自律組織". This term gained attention with the emergence of "The DAO" on the Ethereum blockchain in 2016, but its essence is a completely new form of organization that operates based on rules encoded by smart contracts.**Fundamental Differences from Traditional Enterprises**In a typical company, there is a CEO, a board of directors, and a hierarchical decision-making structure. However, a DAO does not have such a central authority. Instead, rules programmed into the computer (smart contracts) automatically execute all decisions, and community members operate the entire organization based on open-source code. In other words, power is completely decentralized.**Innovations Brought by Smart Contracts**The advent of smart contracts has evolved the concept of decentralized organizations from mere theory to a viable business model. With the automatic execution feature, rules are implemented without human judgment, streamlining previously complex operational processes. As a result, both the reduction of operational costs and the decrease in the risk of human error are achieved simultaneously.**Key Scenes Where DAO Can Be Utilized**The application scope of the DAO model is broader than imagined. For example, it includes automated fundraising such as ICOs, issuance of digital tokens, tokenization of physical assets, and voting systems for important matters. All of these are examples of utilizing the characteristics of decentralized governance of DAOs.**Significance in the Blockchain Era**Just as Bitcoin has realized a peer-to-peer economic system that does not require intermediaries such as banks, DAOs also have the potential to bring fundamental changes to multiple industries such as finance, community management, and project operation through decentralized governance utilizing smart contracts. This innovative approach has made it possible to build a completely decentralized and automated business model.