So how are DAOs different from regular organizations?

Well, most traditional organizations are structured hierarchically.

You have the decision-makers at the top of the structure and very little input comes from the other people below them.

Decision-making is made by a select few and made behind closed doors.

Take a CEO or manager, for example, deciding with which company to form a partnership.

This decision would usually be made without involving everyone else in the company, even if the majority of the other employees disagree with the strategy.

Of course, the decision-making process isn’t always this straightforward in large corporations but the general idea still holds.

A few decide for all.

Unlike traditional organizations, DAOs democratize decision-making.

Every person gets a say on the “big decisions” being made and any changes or amendments are publicly visible on the blockchain for everyone to see.

This governance process is coordinated using tokens (which may be cryptocurrencies or NFTs) which, by their nature, means that votes can be made from anywhere in the world in a decentralized manner.

For this reason, some believe that democracy itself will evolve and become stronger as a result of DAOs.