Decentralized Autonomous Organizations (DAOs) can operate successfully in practice, but their governance models face challenges. DAOs rely on smart contracts and token-based voting for transparent, trustless decision-making. Successful cases like MakerDAO demonstrate effective governance in managing stablecoins through community-driven proposals. However, issues like low voter participation, whale dominance, and coordination difficulties can undermine fairness and efficiency. Real-world applications require clear rules, robust security, and engaged communities to prevent failures, as seen in hacks like The DAO in 2016. With iterative improvements, education, and scalable tools, DAOs hold potential for decentralized governance but need refinement to ensure equitable and sustainable operations.