What is DAO? Decentralized organizational model in Web3

The shift from centralized administration systems to decentralized models has become one of the trends reshaping economic and social structures in the Web3 era. At the heart of this shift is the Decentralized Autonomous Organization (DAO), an entity that operates based on blockchain source code, replacing traditional hierarchies with self-executing protocols and community consensus mechanisms.

According to the analysis team at Tan Phat Digital, DAO is not only a technological tool but also a revolution in organizational theory. Unlike traditional businesses where decision-making power is concentrated in a small group of leaders, DAO distributes power to all governance token holders, creating a transparent environment, without the need for trust in intermediaries and capable of operating autonomously through smart contracts. This research article provides a comprehensive view of technical characteristics, advanced governance models, the role of DAOs and especially an analysis of the changing legal framework in Vietnam in the period 2026-2030.

See more: What is Blockchain?

The nature and origins of Decentralized Autonomous Organizations

By encoding the operating rules into the blockchain, DAO solves the agency problem—where people Management may act in its own interests instead of the interests of shareholders. In this model, "code is law", and all organizational actions must comply with the conditions established in the smart contract.

History of formation and lessons from "The DAO"

The term DAO began to attract widespread attention in 2016 with the project "The DAO" on the Ethereum network. The initial goal is to build a decentralized venture capital fund. However, a security flaw resulted in hackers taking away approximately 3.6 million ETH. This event redefined the way security is designed for decentralized organizations, emphasizing that autonomy cannot be separated from rigorous testing processes.

Technical Infrastructure: Blockchain and Smart Contracts

The operation of DAOs depends on the underlying blockchain infrastructure. Below are the detailed technical specifications of the two most popular platforms:

DAO ecosystem on Ethereum:

Token standard: Mainly uses ERC-20 and ERC-721.
Consensus mechanism: Works based on Proof of Stake (PoS).
Effectiveness Capacity: Gas costs are often high, transaction throughput is limited.
Development framework: Uses mature tools such as Aragon or OpenZeppelin Governor.
Data management: Based on traditional smart contracts.

DAO ecosystem on Solana:

Token Standard: Uses SPL Token standard.
Consensus mechanism: Combines Proof of Stake and Proof of History, for outstanding performance.
Performance: High throughput, low latency and extremely cheap transaction costs.
Framework Development: Use Anchor Framework to optimize security and development speed.
Data management: Take advantage of Program Derived Addresses (PDAs) to make budget management more transparent and controllable.

See more: What is Blockchain Governance?

Governance mechanism and role of Governance Token

Governance in DAO is the process of gathering the will of members through governance tokens. Below are advanced voting models to ensure fairness:

Token-weighted Voting: The most popular model, each token is equivalent to one vote. Simple but easily influenced by large shareholders (whales).
Quadratic Voting: Voting power (V) is the square root of the number of tokens held (T): V=T. This mechanism helps protect the voice of small members against pressure from groups holding large amounts of tokens.
Reputation-based Governance: Voting rights accumulate through actual contributions rather than purchased with money. Reputation points are often tied to a decentralized identity (DID) and are non-transferable.
Delegated Voting: Members can delegate authority to expert representatives, helping to reduce voter apathy and ensure the quality of technical decisions.

Lifecycle of a governance proposal

A standard process that takes place through the Stage: Generating ideas on social channels (Discord), Drafting detailed proposals (Discourse), Official on-chain voting (On-chain voting) and finally Automatic execution by smart contracts.

Comparative analysis: DAO and Traditional Enterprises

Tan Phat Digital would like to summarize the core differences between these two organizational models:

Characteristics of Traditional Enterprises (LLC/JSC):

Leadership: Clear hierarchy with CEO and Board of Directors.
Transparency: Internal data is usually confidential, only periodic reports are released.
Operations: Based on paper contracts and manually signed company charter public.
Legal status: Has clear legal status recognized by the state.
Mobilizing capital: Through shares, bank loans or venture capital funds.

Characteristics of DAO Organization:

Leadership: There is no central leader, authority Power belongs to the token-holding community.
Transparency: All transactions, decisions and votes are completely public on the blockchain.
Operation: Automation through smart contracts (self-executing source code).
Legal status: Currently unclear, often considered a de facto cooperative or need legal wrappers.
Raising capital: Through token issuance or decentralized crowdfunding mechanisms.

Segments and practical applications of DAO

DAO is currently booming in many areas:

Decentralized Finance (DeFi): Protocols such as MakerDAO (DAI stablecoin administrator), Uniswap (DEX administrator) or Aave (currency market administrator) are managing billions of dollars in assets.
Society and Culture: Organizations like Friends With Benefits (FWB) or Developer DAO create community networks co-artists and developers jointly own and manage resources.
Real World Asset Management (RWA DAOs): Projects like Centrifuge or MakerDAO's Ankura trust are connecting real assets (real estate, invoices) with liquidity on the blockchain.

The intersection of DAOs and Artificial Intelligence (DeFAI)

The period 2025-2026 records the rise of AI Agents directly involved in governance. These agents can operate on their own as digital investors or operational managers.

Top example: elizaOS is recognized as the first AI-led investment DAO, making decisions based on real market data.
Challenges: The Super Intelligence Alliance (ASI Alliance) event—includes Fetch.ai and SingularityNET—faced a rift when Ocean Protocol withdrew from the alliance in October 2025 following disagreements over governance and allegations of token dumping, highlighting the risk of economic incentives being out of phase.

Legal Framework and Digital Economy Strategy in Vietnam 2026-2030

Vietnam is trying to bring the virtual asset market out of the legal "gray zone" with important milestones:

Digital Technology Industry Law (DTI Law)

Effective from January 1, 2026, this law officially recognizes digital assets as a type of "property" under the Civil Code, providing legal protection to owners.

Pilot regulations for CASP (Resolution 05/2025/NQ-CP)

The government establishes strict barriers for Cryptographic asset service provider (CASP) to ensure system safety:

Charter capital: Must reach a minimum of 10,000 billion VND.
Domestic ownership structure: Domestic organizations must hold at least 65% of the capital.
Foreign ownership: Maximum limit of 49% to protect digital economic sovereignty.
System security: Meets level 4 standards, ensures 24/7 operation and has a hot backup mechanism (Hot-Hot Redundancy).

Currently, many large units are ready to enter the pilot market such as HDEX (capital 300 billion and roadmap to increase to 10,000 billion VND), VIEX (capital 1,000 billion VND) and TCEX of the Techcombank ecosystem.

Frequently asked questions about the DAO model (FAQ)

1. Is it safe to participate in a DAO?The level of safety depends on source code moderation. Reputable DAOs go through many audits. However, the risk of source code errors or changes in legal regulations is always present.

2. What value does a governance token have other than voting?Many DAOs today apply a revenue sharing mechanism for token holders through buying back tokens (buybacks) or paying rewards from transaction fees.

3. How to create a legal DAO in Vietnam? From 2026, organizations need to comply with the Digital Technology Industry Law, register for the CASP pilot if providing transaction services, and store domestic user data.

4. What is the difference between On-chain and Off-chain voting? On-chain voting records votes directly on the blockchain, costs gas but executes automatically. Off-chain voting costs nothing and is often used to poll opinions before official implementation.

5. Is it possible to issue real assets (RWA) via DAO in Vietnam? According to Resolution 05/2025/NQ-CP, Vietnamese businesses are allowed to issue crypto assets based on real assets other than securities, but are currently only offered for sale to foreign investors.

6. How does DeFAI really change DAO governance? DeFAI allows AI agents to automatically manage lending positions, participate in voting or conduct cross-chain arbitrage, helping to increase processing speed without direct human intervention.

7. Lessons from the ASI Alliance split event at the end of 2025? Ocean Protocol's departure from ASI Alliance shows the fragility of decentralized governance when the economic interests of participating parties are out of phase, leading to legal disputes and accusations of token dumping.

8. What role does Ancient8 play in the DAO ecosystem in Vietnam? Ancient8 is a Layer 2 built on OP Stack focusing on gaming and dApps, promoting network decentralization and community governance through the $A8 token in 2026.

9. Can AI agents completely replace human voters? In models like elizaOS, AI has begun to guide investment decisions. However, the trend in 2026 still prioritizes "human oversight" for decisions with major socio-economic consequences.

10. Who does the minimum capital requirement of 10,000 billion VND apply to? This requirement applies to Cryptocurrency Asset Service Providers (CASPs) who want to be licensed to organize a centralized trading market in Vietnam under the pilot program.

11. How does the "Legal Wrapper" for RWA projects like MakerDAO work? Projects often set up trusts (like Ankura) or SPVs (Special Purpose Vehicle) to sign legal contracts with traditional banks, serving as a bridge to on-chain real assets.

12. What does ZKML technology mean for DAO members' privacy? ZKML (Zero-Knowledge Machine Learning) allows AI to perform complex administrative algorithms on encrypted data, helping to prove decisions are correct without revealing members' identities or personal data.

13. Which sandbox projects are ready to enter the Vietnamese market?Prominent names include HDEX (Sovico/HDBank ecosystem), VIEX (related to VIX Securities) and TCEX (belonging to Techcombank), along with pilots converting USDT to VND in Da Nang.

14. How do data storage regulations in Vietnam affect global DAOs?Decree 53 and the Personal Data Protection Law require storing Vietnamese user data in the national territory, forcing DAOs to adjust their technical infrastructure or use MPC wallets to comply.

Challenges and Future Vision

Despite its great potential, DAOs still face legitimate security risks smart community, Voter Apathy and member liability.

However, by 2026, the ZKML (Zero-Knowledge Machine Learning) trend will help DAOs govern with AI while still protecting privacy. Bicameral governance models (like Optimism's with Token House and Citizens' House) will become the standard to help balance interests. The combination of decentralized identity infrastructure (DID) and progressive legal regulations in Vietnam will open a new chapter for the decentralized organization model, where transparency and efficiency come first.

DAO is not just a new structure for Web3; it is the future of global collaboration without borders. Tan Phat Digital believes that, with careful preparation in both technology and legal aspects, this will be the main driving force to promote Vietnam's digital economy to develop sustainably.