DAO Mechanism

Decentralized Autonomous Organization (DAO) is a governance model that delegates decision-making authority of an organization to its stakeholders. It is structured in a way where the codes, written before the deployment of the smart contract, encompass all rules and details that are transparent and understood by everyone.

Stakeholders can propose and vote on predefined operations by holding and staking the token of that contract. They can cast positive, negative, or neutral votes on the proposed proposals. Due to the occasionally high gas fees on the network, proposals and votes are conducted off-chain to maximize participation.

Many projects with DAO governance can determine varying ratios of token holdings required for wallets to possess voting power. However, these specified ratios will dictate the voting power of the wallet in the contract. Other projects may consider exceeding a certain percentage threshold or taking into account the majority's decision in determining the results of the votes. The project team must act in accordance with the voting results through smart contracts and implement the decisions made.