Most things called a DAO run on a chain other than Bitcoin. This one does not, which is the reason it has its own entry rather than a paragraph inside the Bisq software listing.
BSQ, the token that carries voting power, is a coloured coin. The Bisq wiki puts the mechanism plainly: "A single BSQ token is defined to be 100 satoshis with some additional properties that identify it as BSQ in Bisq software." Outside Bisq those satoshis are ordinary satoshis. Inside it they carry a market value and a governance right. The transactions are Bitcoin transactions, settled by Bitcoin miners, with no separate chain and no separate consensus to trust.
The money flows in one loop. Contributors file compensation requests describing work done and the BSQ they want for it. Stakeholders vote, and approved requests issue new BSQ, increasing supply. Traders then buy BSQ to pay reduced trading fees, and the BSQ they spend is burned. Voting weight combines BSQ committed to a vote with BSQ earned over time through contributions. Some decisions carry higher bars: confiscating a bond requires a quorum of at least 200,000 BSQ and 85 per cent acceptance. There was no token sale. As the project states, "No BSQ is sold to raise capital."
It went live on Bitcoin mainnet on Monday 15 April 2019, when the genesis BSQ transaction was published during a launch livestream. In the first twenty-four hours, 129 trades used BSQ to pay trading fees. The same announcement recorded the constitutional part: "Bisq stakeholders (traders and contributors) are now in charge. The Bisq founder role has been dissolved."
That last sentence was not decorative. A month later the founder stepped back from all roles, and the DAO has funded and governed the project since. It is also the body that handled reimbursement after the May 2026 security incident, which is the test of whether a governance layer does anything when it costs money.