Decentralized Autonomous Organizations are entities without a central authority as decisions on issues relating to the network are reached by the community through a bottom-up system. DAOs can exist in many areas like cryptocurrencies, a DeFi protocol, a charity organization, etc.
The core feature of a DAO is its ownership; it is collectively owned by all its members. Most DAOs have their own treasuries, which can only be accessed through a vote by its members.
DAOs operate through smart contracts on a blockchain. The smart contracts set the rules governing the organization. The members of the community who have a stake in the organization can determine a major change in these rules through a subsequent vote. One major advantage of these organizations is transparency. DAOs have an open code that can be viewed by the public, and their treasuries can be audited by anyone.
These organizations are launched through three main ways; smart contract creation, funding, and deployment on a blockchain. Please note that DAOs nowadays should be differentiated from the infamous 2016 hack of The DAO that led to the split of the Ethereum blockchain.