How Does a Decentralized Autonomous Organization (DAO) Use Smart Contracts?

A DAO operates through rules encoded as smart contracts on a blockchain. These self-executing contracts automate organizational functions, such as voting, treasury management, and enforcing governance decisions, without needing central leadership.

Members use tokens to vote on proposals, and the smart contracts automatically implement the outcomes if the proposals pass. This ensures all actions are transparent, immutable, and follow the agreed-upon rules.