# What is a DAO? By [PatronageDAO](https://paragraph.com/@patronagedao) · 2022-09-07 --- **_What does the acronym DAO stand for?_** It stands for Decentralised Autonomous Organisation, a new form of organisation based on blockchain technology. This form of governance is fully decentralised, meaning no central authority makes the decisions, instead the whole organisation is spread out over many different nodes or systems. Rather than the management making all the decisions, the stakeholders vote on the decisions the management presents. An inverted hierarchy where the majority chooses the organisation’s direction, and these votes and decisions are recorded on the blockchain. With the current pace of tech development, it’s only natural that we develop new means of governance that make our lives easier, and our undertakings automated, transparent, and safe. DAOs rely on smart contracts to execute their functions and implement the outcome of the votes cast by the community. **_What are some of the benefits of DAOs?_** * \*\*Direct Democratisation \*\*— Instead of a single decision-maker, like a CEO, or a small collection of individuals like a Board of Directors, DAOs give the majority a direct say in the decision-making process. They also allow for a direct say in matters rather than representative democracies which can have some unintended consequences. * \*\*Inclusivity \*\*— All the token holders or stakeholders are directly connected to the executive processes of the organisation, empowering them and further deepening the connection between the holders and the entity they support! * \*\*Transparency \*\*— The votes cast are forever visible on the blockchain, encouraging good behaviour and increasing the importance of maintaining a good reputation, thereby incentivising people to make the best choices that benefit the collective. * \*\*Unity \*\*— Never before have people from different backgrounds, cultures, and life experiences come together so seamlessly, working towards a common vision and forming a true community around shared ideals, dismissing the petty differences that divide us. Like all things in life, DAOs are not a magical cure-all. They have their limitations, and we must look at them for what they are — another tool for you on your journey to financial freedom. **_So let’s look at what challenges DAOs face in the day-to-day._** * \*\*Time \*\*— In a centralised organisation, a single person or board decides on all matters. In a DAO, the considerable number of voters can become a bottleneck in the decision-making process since it would take longer to complete the voting process. Some voters may be asleep, others at work or busy with other priorities. * \*\*Information \*\*— Democracy is informed consent, so a DAO must keep all its members informed and up-to-date to be efficient and push the voting process forward. Different time zones, language barriers, and academic barriers are things that come to mind that can impede this process. * \*\*Efficiency \*\*— The former limitations make DAOs more sluggish to act than their more centralised counterparts. This is primarily a factor when the decision is time-sensitive. In the case of PatronageDAO, another buyer might purchase the work of art we’re considering in the time we are still voting on whether to acquire it. Additionally, consensus decision-making when taken to the extreme should have some common-sense limitations, not everyone needs to vote on what colour markers to buy for the whiteboard. * \*\*Regulation \*\*— It’s the friction point that all digital platforms in the Defi space share. While we don’t know what kind of regulations will be implemented in the future, we can talk about what the lack of regulation looked like in the past, bad actors taking advantage of uninformed people and groups. This is an issue that the DAO itself must address by ensuring that people are informed and have all necessary neutral information to make decisions, the DAO must take this seriously to avoid damage to the organisation and its reputation. PatronageDAO is on a mission to democratise art ownership. With the act of giving you this newfound understanding and knowledge, we, the management of PatronageDAO, completed one of the steps necessary to include you in our incredible journey. We have armed you with the information required to make informed decisions, so make the right one, and join us on our mission to democratise the art market and make art available to all! **Become a patron:** * [Website](https://www.patronagedao.com/) * [Twitter](https://twitter.com/patronagedao) * [Telegram](https://t.me/patronagedao) --- *Originally published on [PatronageDAO](https://paragraph.com/@patronagedao/what-is-a-dao)*