How DAOs Are Running Real Businesses in 2026

In this post, I’ll go over How DAOs Are Running Actual Businesses, describing how decentralized autonomous organizations handle operations, treasury funds, and international teams using blockchain technology, smart contracts, and token-based governance.

You’ll discover how DAOs compete with established businesses in the current digital economy, make decisions, guarantee transparency, and produce income.

What Is a DAO?

DAOs, or Decentralized Autonomous Organizations, are primitive novel business models that operate on smart contracts without central control. Traditional businesses are led by a CEO or Board of Directors; in contrast, businesses run by a DAO are governed by its token holders, who vote on matters of management.

Operating on the Ethereum Blockchain, DAOs are completely transparent: the contracts that detail a DAO’s governing rules are publicly visible and self-executing. Each DAO member is granted governance tokens, the quantity of which are proportional to the member’s voting power. DAOs typically house their finances in a Wallet controlled by the DAO, which typically requires a majority vote in order to spend the DAO’s treasury.

The applicable use cases for DAOs are vast: they can operate the finances of a business, manage DeFi or media projects, manage NFTs, or even manage a real-world business. The main traits of a DAO are its decentralization, transparency, community ownership, and automation.

DAOs, however, are not without their faults: most countries of the world have not produced legal frameworks in which DAOs can exist without coordination failures. In the end, DAOs are novel business models that help eliminate the need for central control and allow all parts of the world to participate in the same organization.

How DAOs Are Running Real Businesses

Step 1. Mission and Business Model

DAOs identify their mission (i.e DeFi protocol, investment fund, NFT brand, media network, or service platform) and formulate clear goals, revenue model, and governance structure, all of which are included in the project’s whitepaper.

Step 2. Smart Contracts

DAOs are built using a blockchain, such as Ethereum, and deploy smart contracts to govern how each of the following will be automated (i.e rules for governance, control of the treasury, voting, token distribution, and so forth)

Step 3. Governance Tokens

The DAO’s governance tokens (which provide voting right) can be obtained in a variety of ways (i.e public sale, airdrop, rewards to contributors, and liquidity mine).

Step 4. Governance

Members can make use of voting within the governance model and they can propose, discuss and vote. Executively approved proposals will be implemented by a system multisig signers.

Step 5. Treasury Management

DAOs employ multi-signature wallets for greater security. Community agreement allows the withdrawal of any funds to ensure accountability.

Step 6. Global Contributor Network

DAOs unchain borders in their payroll system, which allows for changes in the way countries can be included in the payment system. They can hire developers, marketers, designers, legal advisors, community managers, and many more contributors.

Step 7: Release Products or Services 

The DAO launches its services. This could be a DeFi platform, an NFT marketplace, a consulting service, or a venture fund. Revenue starts coming from transaction fees, token utilities, subscriptions, or investments.   

Step 8: Streamline Operations 

Smart contracts reward distribution, treasury payments, and governance decisions. This cuts admin costs and improves effectiveness.  

Step 9: Develop Legal Structure 

To interface with legacy systems, a lot of DAOs set up as LLCs or foundations in crypto-friendly locations. This offers a combination of legal recognition and compliance benefits.  

Step 10: Scale and Evolve 

The DAO perpetually proposes upgrades, broadens collaborations, diversifies revenue streams, and adjusts its governance models. Community-centered innovation fuels growth over time.

Benefits of DAOs Running Businesses

Decentralized Control

Centralized control of the entity does not exist. Control is distributed and the token holders vote on the decisions, therefore increasing the level of control and influence the participants have on the decisions that will guide the entity.

Complete Transparency

Each transaction, proposal, and movement of the treasury is recorded on the Ethereum blockchain, and members can track treasury and governance activities on the blockchain.

Participation from Anywhere

Global participation is possible. Anyone that has access to the Internet can obtain governance tokens, participate, fund, and vote.

Smart Contracts

The use of smart contracts reduces the need to have operational assistants and employees.

Ownership Governance

The members that have governance tokens are owners of the organization. Therefore, the participants’ interests are aligned with the organization’s interests and will work for the organization to be successful.

Increased Speed for Change

Proposals are opened for community members to discuss and test new ideas, upgrades, and changes.

Payments without Borders

DAOs use crypto to pay participants, which means that there is no need for a bank system to pay participants to work for the DAO.

Increased Safety

Treasuries are safe because there are no single points of failure with decentralized tech and multi-signature wallets.

Automated Governance

After a proposal is accepted, smart contracts handle the execution of the proposals so that the rules have been followed automatically without any delaying or any bias.

Inclusive Investment Opportunities

DAOs offer the chance to invest in projects that used to be the exclusive realm of venture capitalists or accredited investors.

Legal Recognition and Regulatory Frameworks in 2026

Legal Wrappers for DAOs

A number of DAOs are gaining legal personhood and limiting personal liability by registering as limited liability entities. In the U.S., Wyoming, for example, recognizes DAO LLCs. There are also new legal frameworks in the Marshall Islands that give DAOs the ability to have legal entities by On-Chain Governance.

Recognition in Crypto-Positive Countries

Switzerland and Singapore are still very supportive of blockchain developments. Their regulations for foundations, token issuance, and digital assets have allowed these countries to become hubs for DAO foundations and protocol treasury.

DAOs, KYC and Compliance

As DAOs are beginning to earn revenue and cross the line to the traditional finance world the enforcement of regulatory frameworks around AML and KYC become more stringent, especially for investment DAOs, stablecoins, and treasury management.

Securities and Token Classification

Depending on their design and the inclusion of profit expectations, governance tokens may be classed as securities. Regulators examine the potential of a token as a utility vs an investment contract, shaping DAOs approach to structuring and launching tokens.

Taxation Considerations

Tax implications, as they relate to jurisdiction, can be quite different. Contribution and holdings of tokens may be taxed differently concerning DAO revenue, tokens distributed, staking and treasury rewards. This is why accounting/bookkeeping and reporting becomes crucial.

Hybrid Governance Models

Many DAOs are developing hybrid structures in which they retain fully {decentralized} onchain governance while also running a legally registered foundation or LLC for contracts, employment, and partnerships.

Ongoing Regulatory Challenges

The global regulatory landscape is continuously developing. As of 2026, issues surrounding liability, cross-border enforcement, smart contracts, and decentralized identities remain a challenge. Regulatory uncertainty remains a challenge, despite legal advancements in DAOs.

Revenue Models of Modern DAOs

Fees Earned from Protocols

Several DeFi DAOs charge a small fee on trade, swap, lend, or stake activities, and therefore earn revenue through these activities. For example, decentralized exchanges like Uniswap pay out exchange fee income to token holders or treasury funds.

Staking and Validation Payouts

DAOs that run a blockchain infrastructure or staking pools receive moderation compensations/rewards. These rewards are either paid to community contributors or are added to the treasury.

Token Value Increases and Treasury Appreciation

A large number of DAOs hold either their own native token or some other form of cryptocurrency. The value of the DAO’s treasury increases along with value increases of the crypto token.

Revenue from Selling NFTs and Other Digital Assets

DAOs created by developers or the community sell NFTs, digital memberships, and branded digital assets. Revenue from these sales is used to pay for development activities, community events, and to expand the ecosystem.

Funding and Venture Capital Activities

Investment DAOs conduct capital pooling for the funding of commercial startups and web3 projects. Profits are made through possession of shares, token distribution, or revenue-sharing agreements.

Subscription and Membership Models

DAOs have developed methods like payment-based memberships or token-gated subscriptions to provide premium access to exclusive communities, research reports, or software tools.

Service-Based Revenue

Service DAOs provide other crypto projects with development, marketing, design, consulting, or legal services, enabling contributors to earn a steady income.

Grants and Ecosystem Funding

DAOs can access ecosystem grants from big blockchain foundations or networks to develop resources, scale infrastructure, or enhance communities.

Yield Farming and DeFi Strategies

Treasuries put in place decentralized finance methods like liquidity provision, lending, and yield farming to obtain passive income.

Real-World Asset (RWA) Integration

Some DAOs earn revenue through tokenized real estate, bonds, or commodities, and real-world assets (RWAs) which provide income from rentals, interest, or dividends.

Real-World Examples of Business DAOs

Uniswap (DeFi Exchange DAO)

Uniswap is a DAO where governance is assigned to UNI token holders. They vote on protocol updates, changes in fees, and changes in how the treasury is allocated. It is one of the largest decentralized exchanges and its treasury is filled via the revenue generated from trading activity.

MakerDAO (Stablecoin & Lending DAO)

MakerDAO suggests changes to the DAI stablecoin system. As a DAO, they have a say in the collateral of stablecoins, the risk, and how the treasury is used. Therefore, they act as a decentralized bank.

Aave (Lending Protocol DAO)

Aave DAO governs the lending markets and the liquidity pools. They are also responsible for voting on protocol changes. Governance token holders are those that vote on the risk and where the protocol expands.

ConstitutionDAO (Crowdfunding DAO)

Although ConstitutionDAO has been short lived, it showed how DAOs can bid on assets. They were able to raise over $40M to bid on a rare document.

Friends with Benefits (Creator & Community DAO)

Friends with Benefits is a token-gated community that has events and networking and collaborations, and is funded by membership tokens.

BitDAO (Investment DAO)

BitDAO is a DAO that pools its capital to invest in Web3 start-ups and infrastructure projects. Governance tokens are used to distribute voting power to the holders of the tokens.

PleasrDAO (NFT & Digital Asset DAO)

PleasrDAO focuses on purchasing NFTs and other digital assets that hold significance in culture and history. The DAO manages these assets collectively and utilizes them to create value for their community.

Technology Powering DAO Businesses

Blockchain Networks

DAOs operate on Ethereum and Ethereum compatible networks to take advantage of Ethereum’s transparency, decentralization, and smart contract capabilities. DAOs that do not want to be hindered by high transaction costs on Ethereum also operate on networks like Polygon.

Smart Contracts

Once Smart Contracts (which serve as the DAO’s rules of governance, treasury, and voting distribution, and rewards) Organizational Smart Contracts operate as small autonomous entities and do not require third parties to facilitate their actions.

Governance Platforms

Snapshot and similar tools facilitate decentralized governance by providing off-chain voting, proposal structuring, and community engagement.

Multi-Signature Wallets

DAO treasury funds are secured in multi-sig wallets like Gnosis Safe, wherein cryptocurrency transactions are based on the approval of a pre-determined number of authorized signers in an effort to eliminate single point of failure.

Token Standards

ERC-20 and ERC-721 tokens set the rules for how governance and utility tokens are created, as well as how NFTs are created. These tokens provide voting rights, equity, and utility in DAOs.

Decentralized Identity (DID)

Some DAOs have a decentralized identity solution in an effort to verify and protect the privacy of the participants. This prevents governance attacks by in and ensuring all participants a say.

Tools for Communication & Collaboration

For global coordination using DAO’s Discourse and Discord are used for community updates, discussion, and proposal arguments.

Dashboards & Analytics for Treasury

Real-time on-chain analytic tools show the treasury balances, the distribution of tokens, & the financial status of the DAO, providing transparency to the DAO members.

Challenges and Risks

Regulatory Risks

There are still a lot of jurisdictions in the world that do not have frameworks that oversee DAOs. Each jurisdiction has different compliance requirements, and in some jurisdictions, governance tokens may need to be qualified as securities.

Vulnerability of Smart Contracts

DAOs are predominantly reliant on Ethereum smart contracts. These contracts are vulnerable to coding errors, and if an exploit is found, it may be catastrophic. This may include hacks, and loss of the treasury, or other critical system components.

Governance Attack

‘Whales,’ the large holders of tokens, will have the risk of centralization. Also, some actors may be incentivized to buy up large quantities of a token and control governance positions.

Voter Apathy

Participation in governance votes is typically very low, and if there is significant or important feedback needed by the community, the proposal is likely to be ignored.

Coordination

With pseudonymity/great anonymity, a workforce that spans the globe may create issues with communication, as there is great potential to procrastinate, lose/gain control, and responsibility or accountability.

Volatility

Treasuries are typically in some form of cryptocurrency and are thus highly volatile. This will lead to a loss of funding available for critical operations during a bear market.

Legal Wrappers

In some jurisdictions, there is a risk that members or core contributors will be legally liable for the DAO activities if there are no legal wrappers.

Risks Related to Security and Custody

Security enhancements are possible with tools such as Gnosis Safe, but treasury funds are still vulnerable to compromised keys or insider threats.

Limitations Regarding Scalability

The efficiency of on-chain voting and transactions is limited by expensive and slow network congestion.

Risks Related to Reputation and Trust

Trust can be fragile because many DAOs are anonymous. Internal conflicts, untrustworthy proposals, and security problems can undermine credibility.

The Future of DAO-Based Businesses

Hybrid solutions that blend decentralized governance with practical legal recognition and scalable infrastructure are the way of the future for DAO-based enterprises. DAOs are anticipated to go beyond DeFi into industries like venture capital, media, supply chains, gaming, and even real-world asset management as blockchain networks like Ethereum continue to increase productivity and save expenses.

By automating proposal analysis, treasury optimization, and workflow coordination through integration with AI tools, governance will become more efficient and intelligent. DAO-friendly laws that offer more transparent liability protection and compliance routes are probably going to be introduced in more jurisdictions.

By facilitating international, community-owned businesses that function openly, allocate value equitably, and grow without the need for conventional corporate hierarchies, DAOs have the potential to fundamentally alter entrepreneurship in the long run.

Conclusion

What were once experimental cryptocurrency communities, DAOs are now fully operational, revenue-generating business models. They are changing the business world with the business model’s transparency of the blockchain, automated smart contracts, token-based voting, and the ability to work collaboratively from anywhere on the globe.

Decentralized Autonomous Organizations (or DAOs) are changing the way we structure and run businesses. We can see from many DAOs on Ethereum, the ability to distribute control and make autonomous executive decisions at scale.

DAOs have many challenges: regulatory ambiguity, security risks, governance issues, etc. Most DAOs are using legal wrappers, more sophisticated treasury management, and hybrid governance. We see DAOs using the most cutting-edge solutions in the space.

They are taking modern technology and with the stabilization of regulations, we see the potential for DAOs to operate like businesses without the need for a central business model. DAOs are the future of community-owned businesses on the internet. They provide a model to operate businesses free of any central control.

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