How do DAOs work?

DAOs (decentralized autonomous organizations) work by not having a central authority governing them. If you invest in a crypto project that's managed by a DAO, you automatically become a part of the DAO, meaning that you can vote and contribute on how the project will unfold in the future.

Let's say you invested in Solana. For each SOL token you own, you can contribute one vote regarding an important matter in the project's future. Of course, the team that created the project are almost always a part of the DAO, since they probably own a certain percentage of the total token's issued.

Regarding the DAO's funding, the entire project gets funded every time someone invests in its token.