A decentralized autonomous organization (DAO) has no central leadership. Decisions are made from the bottom-up, governed by a community organized around a specific set of rules enforced on the blockchain.
DAOs are internet-native organizations collectively owned and managed by their members. They have built-in treasuries that are only accessible with the approval of their members. Decisions are made via proposals the group votes on during a specified period.
A DAO works without hierarchical management and can have many purposes.
Freelancer networks where contracts pool their funds to pay for software subscriptions, charitable organizations where members approve donations and venture capital firms owned by a group are all possible with these organizations.
You can now see why DAOs are a popular topic among crypto investors.