How Do Smart Contracts Automate Treasury Management and Capital Allocation in a DAO?

Smart contracts automate DAO treasury management by codifying the rules for fund allocation. Proposals to spend treasury funds, once approved by a token-holder vote, trigger the smart contract to automatically execute the transfer of assets to the specified recipient.

This process eliminates the need for manual intervention by a finance department. For capital allocation, DAOs can program smart contracts to automatically invest in specific assets, provide liquidity, or execute complex derivative strategies based on predefined conditions.