How Does a Decentralized Autonomous Organization (DAO) Structure Attempt to Mitigate Smart Contract Risk?

A DAO mitigates risk by decentralizing the governance of the smart contract system. Key parameters, or even the ability to upgrade the contract, are controlled by a collective vote of token holders, not a single entity.

This community oversight provides a mechanism to propose and approve patches for vulnerabilities, or to reverse catastrophic transactions, offering a limited 'human' layer of defense against permanent code flaws.