The idea of a Decentralized Autonomous Organization (DAO) predates Ethereum. It appeared in crypto-libertarian writings as early as 2013 — the vision of a company, non-profit, or community organized entirely by smart contracts, with no central leadership and no legal structure. Members would hold tokens that represented voting rights. Decisions would be made by on-chain voting. Funds would be managed by code. It was a utopian vision of pure democracy.
The first major DAO was The DAO in 2016, which famously failed due to a hack (as covered in an earlier article). For years after that, the concept lay dormant. But in 2020-2021, DAOs came roaring back. Dozens of them launched, with varying degrees of decentralization and sophistication. Some governed DeFi protocols. Some were investment funds. Some were art collectives. Some were experiments in digital democracy.
MakerDAO was one of the most successful. Its MKR token holders vote on everything from which collateral types to accept to how much to charge in fees. Uniswap has a DAO that governs its protocol. Compound has a DAO. Aave has a DAO. These DeFi DAOs manage billions of dollars in assets and make real governance decisions through on-chain voting.
But DAOs weren’t limited to DeFi. ConstitutionDAO emerged in November 2021 with a wild goal: raise money to buy a copy of the U.S. Constitution at auction. Within five days, anonymous crypto users had contributed over $47 million. ConstitutionDAO lost the auction to Citadel CEO Ken Griffin, but the experiment proved that DAOs could mobilize huge resources around shared goals. Thousands of people who had never met coordinated millions of dollars in days.
DAOs have struggled with real challenges. Voter participation is often low — most token holders don’t vote. Decision-making can be slow and contentious. Legal status remains unclear in most jurisdictions. And fully autonomous DAOs have often proven less effective than those with some human leadership. Despite these challenges, DAOs continue to proliferate and evolve. By 2024, thousands of DAOs existed, collectively managing tens of billions of dollars. They represent a genuine experiment in new forms of human coordination, made possible by blockchain technology.
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