Decentralized autonomous organization
A decentralised autonomous organisation (DAO), also known as a decentralised autonomous corporation (DAC), is an organisation that is constructed by rules that are encoded as a computer programme. This type of organisation is typically transparent, is controlled by the members of the organisation, and is independent from the influence of a centralised government. In broad strokes, decentralised autonomous organisations, or DAOs, are communities that are owned by their members yet lack centralised leadership. A blockchain is used to store the financial transaction records and programme rules of a decentralised autonomous organisation (DAO). There is a lack of clarity on this form of corporate organization's specific legal standing.
The DAO is a well-known example that was designed for venture capital funding. It accumulated 3.6 million ether (ETH), which was Ethereum's mining reward at the time. At the time, ETH was worth more than US$70 million. However, it was hacked in May 2016 and lost US$50 million in cryptocurrency a few weeks later. A hard fork of the Ethereum blockchain was used in the subsequent weeks to undo the breach and return the funds lost as a result of the attack. The majority of Ethereum miners and customers made the transfer to the new chain after the split, which resulted in Ethereum Classic being created on the old chain.