# DAO

*Crypto & Digital Assets — Finicade finance glossary*

A DAO is an organisation whose rules and treasury are governed by token-holder votes executed through smart contracts. In practice governance concentrates fast: turnout is low and large holders decide outcomes, reproducing the shareholder-control problems it was meant to escape. Legal status remains unsettled, and a US court has held that a DAO's members could be treated as a general partnership.

**Also known as:** decentralized autonomous organization, DAOs, on-chain governance

**Related terms:** [Smart Contract](https://finicade.com/glossary/smart-contract), [Web3](https://finicade.com/glossary/web3), [Corporate Governance](https://finicade.com/glossary/corporate-governance), [Airdrop](https://finicade.com/glossary/airdrop), [DeFi](https://finicade.com/glossary/defi)

Source: https://finicade.com/glossary/dao