What are DAOs?

Decentralized Autonomous Organizations

DAOs are decentralized autonomous organizations that operate according to a set of rules written in the blockchain. The idea is that these rules will be transparent, immutable and, above all, democratic.

Decentralized Autonomous Organizations, or DAOs, are organizations governed by computer programs and the community of users who interact with them. The rules of governance are transparent and immutable because they are written in the blockchain. These rules provide the framework for how decisions are made within a DAO.

DAO governance is coordinated using tokens or non-fungible tokens (NFT) that confer voting powers. Admission to a DAO is limited to those who have confirmed ownership of these governance tokens in a portfolio of crypto-currencyand membership can be exchanged. Governance is provided by a series of proposals on which members vote via the blockchain, and owning more governance tokens often translates into greater voting power.

Security

Decentralized Autonomous Organizations (DAOs) are one of the most interesting projects of the technology blockchain. They are essentially a collection of smart contracts that can coordinate to perform functions such as fundraising, payroll and governance.

DAO code is difficult to modify once deployed on the blockchain. Fixes require writing new code and migrating all funds, which is time-consuming and risky. This makes it more difficult for developers to correct known security flaws than with a centralized code base.

In 2016, The DAO became the largest crowdfunding campaign to date; however, a flaw in its design allowed investors to withdraw money at will that had not yet been committed to a project. As a result, The DAO quickly ran out of funds due to the numerous withdrawals made by hackers exploiting known security flaws in its code base....

Some observers are skeptical about DAOs, suspecting that they are nothing more than new ways of speculating, at worst vast scams.
Recently, members of AnubisDAO lost hundreds of thousands of dollars invested in the project, only to see the money mysteriously transferred out of the group.

Scam or not, DAOs are still risky investments because the project, like any young startupIt could very well stop after just a few months, or see its value fall drastically.