A decentralized autonomous organization (DAO) is an organization where organizational decisions are made electronically by hard-coded rules (smart contracts) or through the voting among its members.
The original concept of DAO was first released in the year 2016, which is sometimes referred to as DAO 1.0. The World’s first DAO was called “The DAO” – that was meant to operate like a venture capital fund for the crypto and decentralized space.
It would allow anyone with a project to pitch their idea to the community and receive funding from the “DAO”. Anyone who owned DAO tokens could vote on projects, and receive rewards if the projects turned a profit. The lack of a centralized authority reduced costs, made the process more democratic and transparent while giving more control to the investors. Every process in the DAO was automated and could run on smart contracts.
“The DAO” project got so much attention that it managed to raise $150 million breaking all the previous crowdfunding records. A decentralised organization, one which was not limited by geographical barriers or unnecessary restrictions, was an idea exciting enough for anyone in that time to bet on.
But despite a great beginning, the journey of Ethereum based project “The DAO” turned sour when it got hacked. Finding a loophole in the smart contract, some hacker was able to drain “The DAO” of its funds that led to a commotion in the Ethereum community which eventually forced its creators to hard fork the blockchain to send the hacked funds to an account available to the original owners.
For the following months, the whole concept of DAO sunk into oblivion, up until the year 2017 when entrepreneurs across the world brought this concept and idea again to light and they began calling it DAO 2.0.
DAO 2.0 was expected to be a better-refined version of DAO 1.0, one which would literally have every operation of an organization digitized as well as decentralised. One which would allow anybody to create, operate