Learn: Glossary & FAQs
TL;DR: A concise, vendor-neutral glossary of common DAO concepts and a short FAQ for newcomers and decision-makers.
Glossary (A–Z)
- DAO (Decentralised Autonomous Organisation)
- An organisation coordinated by on-chain rules and off-chain social norms. ‘Autonomous’ refers to protocol-defined processes; human governance remains important.
- Governance Token
- A token that confers voting or signaling rights. Utility or value depends on the community, the treasury, and the rules for proposals and execution.
- Treasury
- Assets held collectively by a DAO, typically controlled by votes or multisig signers with clear thresholds and procedures.
- Multisig
- A wallet that requires a threshold (e.g., 3-of-5) of signers to authorise transactions. Often used as a security layer for DAO funds.
- Quorum
- The minimum participation required for a proposal to be valid. Can be absolute (e.g., 10,000 votes) or relative (e.g., 20% of supply).
- Delegation
- Assigning voting power to a trusted representative who participates regularly on behalf of token holders.
- Snapshot Voting
- Off-chain, gas-less voting captured at a specific block ‘snapshot’ for fairness and cost efficiency.
- On-chain Execution
- When approved proposals trigger transactions or parameter changes directly on smart contracts.
- Proposal
- A structured change request, including context, rationale, impacts, implementation plan, and success criteria.
- Proposal Threshold
- A minimum requirement (tokens or reputation) to submit proposals to reduce spam and low-effort items.
- Working Group
- A focused team within a DAO tasked with specific operational responsibilities and a defined budget.
- Constitution / Charter
- A document describing values, scope, processes, and amendment rules. Often ratified by token vote.
- Forum
- The primary asynchronous venue for discussion, drafts, and temperature checks before formal voting.
- Temperature Check
- An early signal-gathering step (e.g., forum poll) to test interest before a full proposal.
- Reputation
- Non-transferable influence based on contribution history or roles; used by some DAOs instead of tokens.
- Quadratic Voting
- A voting method that increases the cost of additional votes to reward broader support over concentration.
- Treasury Diversification
- Adjusting assets (e.g., stablecoins vs governance token) to manage volatility and runway.
- Service Provider
- An external contributor or firm engaged via proposal to deliver scoped work under DAO oversight.
- Transparency Report
- A periodic, accessible summary of outcomes, spend, and metrics, enabling community oversight.
- Risk Register
- A simple list of key risks, likelihood, impact, and mitigations maintained by a working group.
- Code of Conduct
- Expectations of behaviour and moderation policies; helps align norms across open communities.
- Guardrails
- Explicit constraints (spend caps, signer thresholds) that reduce downside while preserving agility.
FAQs
Is the term “DAO” still relevant?
Yes. While tools evolve, the core idea, shared resources governed by stated rules and community oversight, remains useful in many ecosystems.
Do DAOs remove the need for human judgement?
No. Automation helps, but interpretation, context, and prudence are human responsibilities. Most DAOs blend code and community process.
What makes a governance proposal good?
Clarity, context, measurable outcomes, defined budget and timeline, identified owners, and explicit success criteria with follow-up reporting.
How do DAOs reduce voter fatigue?
Delegation, sensible thresholds, batching changes, clear summaries, and predictable voting cadences help focus attention.
Are multisigs enough for security?
They improve safety, but should be combined with clear signer rotation, incident procedures, and regular transparency reporting.
What does a healthy treasury practice look like?
Clear budgeting, diversification guidelines, routine reporting, and independent reviews of spend versus outcomes.
What’s the role of forums and link-logs?
Forums capture deliberation history; link-logs surface signals. Together they improve context for newcomers and voters.
Why would a project choose a name like ‘DAO Bits’?
It’s short, descriptive, and neutral, good for a curated knowledge hub, analytics, or an educational brand.