To understand DAOs, you first need to understand the technology behind them. Most DAOs rely on blockchain technology and smart contracts, which are collections of code that run on the blockchain. A blockchain is a decentralized, digital ledger which is commonly known to publicly document transactions of different cryptocurrencies. For DAOs, the blockchain can act as a backbone, keeping the structure and rules of each on-chain. In traditional organizations, there’s typically a hierarchy. A formal board of directors, executives or upper management determine the structure and have the power to make changes. DAOs, on the other hand, are decentralized, which means they aren’t governed by one person or entity. The rules and governance of each DAO is coded in smart contracts on the blockchain and cannot be changed unless voted upon by the DAO’s members. Instead of a select few having the majority of say, members of each DAO can vote on decisions together, typically on equal footing. Sometimes, in larger DAOs, teams may form to tackle different aspects of the organization with leaders that have been voted in. That way, not every single member is needed to vote on every nuance. The most important aspect of DAOs is transparency. Every decision within the DAO is pitched, discussed, voted on and documented publicly.