A DAO is a self-sustaining, virtual entity defined by “smart contracts that contain the assets and encode the bylaws of an entire organization”. All financial transactions, rules, and decisions are enacted and stored on the blockchain, creating a transparent and verifiable record. Rules are initially set forth in smart contracts, and members (participating token holders) interact according to these regulations to further the goals of the organization. Organizational rules can be modified through mechanisms contained in the on-chain contracts or through an off-chain governance process.