In this track: How people use Ethereum
intermediate · 3 MIN READ

DAOs and shared decisions

Groups can express some governance rules through contracts and coordinated processes.

LET’S PICTURE IT

A club can combine member discussion, voting rules and a shared treasury rather than giving one person every decision.

SEE IT FOR YOURSELF
Receive, check and share across independent nodesStep 1 / 4
Receive, check and share across independent nodesIncoming dataCandidate instructionNot yet trustedNode AReceives the messageApplies local checksEach participant has a local view of incoming informationNode A checksAuthorizationProtocol validityValid candidateEligible for next stepsNot a finality promiseApplication safety is a different claim from protocol validityNode AShares checked dataNode BChecks for itselfNode CChecks for itselfNode ARules checked✓Node BRules checked✓Node CRules checked✓Agreement on history adds the consensus mechanism

A node receives a proposed transaction or block-related message. Receipt is not the same as accepting its claims.

Animated local teaching model. No wallet, RPC or live blockchain data. Some labels and hashes are abbreviated for readability.

Governance is a system of rules

A DAO can define how proposals are made, votes are counted and actions are executed. Different organizations use different mixes of onchain mechanisms and offchain coordination.

The label does not specify all powers

Treasury control, emergency roles, vetoes and upgrades can affect who actually holds authority. An organization called decentralized may still rely on a small controller for important actions.

Participation and ownership differ

A governance token or membership rule can grant particular voting powers. It does not automatically make the holder a shareholder in a conventional company or grant unrestricted treasury redemption rights.

Read the path from discussion to execution

A popular forum post may not be an executable proposal. Identify the actual vote, threshold, delay and transaction mechanism before concluding what the group authorized.

QUICK CHECK · NO PRESSURE

Does every DAO use exactly the same voting and execution rules?

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Original explanations by EtherTools. Examples are educational and source-linked; this site is independent of the Ethereum Foundation. Our approach.