Definition ∞ A decentralized organization operates without a central authority, relying instead on automated rules and collective decision-making by its participants. Its operational guidelines are often encoded in smart contracts on a blockchain, governing resource allocation and governance procedures. Members typically hold tokens that grant voting rights, allowing them to propose and vote on changes. This structure aims to distribute control and promote transparency.
Context ∞ Decentralized organizations, often referred to as DAOs, are frequently mentioned in crypto news concerning governance updates, protocol changes, and community-led initiatives. Their effectiveness in managing complex projects and treasuries is a subject of ongoing debate and experimentation within the digital asset ecosystem. The legal and regulatory status of these organizations is an evolving area, with jurisdictions worldwide examining how to classify and supervise them.
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