Introduction to the DAO

The Bisq exchange network is organized as a decentralized autonomous organization (DAO). The Bisq DAO's purpose is to make the Bisq's governance model as decentralized and censorship-resistant as the Bisq network itself.

The Bisq founders realized that decentralized software—no matter how technically robust—is no good if it’s still controlled by a single entity. All the software’s technical strength would be worthless if the whole project could be ruined by attacking the single entity that runs it.

Thus the need for decentralizing the resources in charge of running Bisq itself. These resources cannot be organized in the form of a company, a nonprofit, or any other traditional organization because a single entity would be a single point of failure. But what to do? How can a project do anything useful without becoming an organization with some kind of structure? How can strategy be determined? How can resources be allocated? How can work get done? How can revenue be earned, and how can it be distributed?

The Bisq project needed infrastructure to provide these functions, and the Bisq DAO is its solution.

You can see a video version of this introductory article in this YouTube playlist.

What is a DAO?

Conventional entities such as for-profit and non-profit corporations must be sanctioned by the state: they are legal entities registered in particular jurisdictions. No matter how big or small or virtuous or innovative they are, they cannot operate without state approval. In return for this approval, the entity is endowed with rights (e.g., limited liability) and responsibilities (e.g., taxes).

A decentralized autonomous organization (DAO) is just a generic term for a governance model sanctioned by software: code defines conventions for governing the project irrespective of the stance of the state.

We say a DAO’s governance model must be sanctioned by software, not necessarily controlled by software. The Bisq DAO, for example, is not controlled by software: software merely provides a framework for the people involved with the Bisq project to (collectively) manage the software itself. The Bisq DAO operates on the idea that code is not law. Code is written by humans to provide a service to other humans, so it should be accountable to humans too.

The universe of DAOs is diverse. Just as companies come in many shapes and sizes, and some companies are scammy, fraudulent, or just poorly managed—that’s no reason to assume all companies are the same way. It’s the same with DAOs: some DAOs haven’t worked out so well, but others might turn out differently.

Learn more

For more information on how you can use the DAO, how it works, its technical foundations, etc. please see [Link to DAO page]