DAO meaning stands for Decentralized Autonomous Organisation. In general, a DAO is a system of hard-coded rules that define which actions a decentralized organisation will take.
In other words, a DAO refers to a particular kind of organisation that, unlike conventional companies, is based on open source code and is operated entirely by its community. Therefore, the underlying structure and working mechanisms of a DAO are not based on any kind of hierarchical management (which are quite common in traditional businesses).
This means that a DAO has no single entity in charge, nor any directory board and, as the name suggests, there is no centralization of power. DAOs are conducted by computer-encoded rules (smart contracts) and are governed by the collective work of its contributors and community members. Using smart contracts to automate working mechanisms and functionalities makes DAO a useful concept. It has huge upside in business, by enabling businesses to run in an automated and decentralized manner.
Furthermore, the DAO model enables the creation of more efficient systems by reducing the need for human inputs, which in turn reduces the overall operational costs and the risks related to human behaviour.
In conclusion, DAO meaning stands for Decentralized Autonomous Organisation, and DAOs enable more efficient and decentralized systems to execute themselves through the use of smart contracts.
