DAO stands for "decentralized autonomous organization," the concept for which was described in a March 2016 white paper written by Christoph Jentsch who helped found the DAO. The point of a DAO is to automate decision-making in an investment fund. The fund is created by individuals paying in ether and receiving a proportionate number of DAO tokens. The DAO holders can propose to use some of the ether to fund projects that employ smart contracts on Ethereum, the ether platform. DAO holders vote to approve or disapprove an individual project and share in the revenues generated by successful projects. The white paper is general, meant to apply to any venture capital decentralized autonomous organization.
The DAO organization was an early experiment that failed due to a glitch in the protocol that was exploited by an unidentified developer.
A Singapore company, DigixGlobal, launched another one of the early DAOs, DigixDAO, which is governed by the holders of its DGD coins. DigixGlobal raised $5.5 million worth of ether in a half day-long crowd sale in April 2016 to create DigixDAO. Since then, DigixDAO launched the gold-based stablecoin Digix.