What does DAO stand for and its primary function?

The term "DAO" stands for Decentralized Autonomous Organization, which accurately captures its essential characteristics. A DAO is an organization represented by rules encoded as a computer program that is transparent, controlled by organization members, and not influenced by a central authority. It operates through smart contracts on a blockchain.

The primary function of a DAO is to facilitate decision-making processes and manage resources in a decentralized manner. Members of a DAO typically hold tokens that grant them voting rights, allowing them to collaborate on proposals, allocate funds, or make other critical decisions that affect the organization as a whole. This structure aims to create a more democratic form of governance and encourages participation from all members, ensuring that decisions are made collectively rather than being dictated by a central figure.

The other options reflect terms that either do not exist in the blockchain context or mischaracterize the fundamental aspects of what a DAO embodies. Thus, knowing that DAO stands for Decentralized Autonomous Organization provides clarity on its purpose and operational design within the blockchain ecosystem.