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

**Published:** 2025-12-04
**Author:** Greeks.live
**Categories:** Path

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## 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.

- [How Do Decentralized Autonomous Organizations (DAOs) Fit into Blockchain Governance?](https://learn.greeks.live/path/how-do-decentralized-autonomous-organizations-daos-fit-into-blockchain-governance/)

- [How Do DAOs Use Smart Contracts to Manage Risk for a Portfolio of Crypto Derivatives?](https://learn.greeks.live/path/how-do-daos-use-smart-contracts-to-manage-risk-for-a-portfolio-of-crypto-derivatives/)

- [What Role Do Decentralized Autonomous Organizations (DAOs) Play in Governing MEV-resistant Protocols?](https://learn.greeks.live/path/what-role-do-decentralized-autonomous-organizations-daos-play-in-governing-mev-resistant-protocols/)

- [How Do Smart Contracts Facilitate the Process of Decentralized Autonomous Organizations (DAOs)?](https://learn.greeks.live/path/how-do-smart-contracts-facilitate-the-process-of-decentralized-autonomous-organizations-daos/)

- [What Is the Role of a Blockchain in Executing Smart Contracts?](https://learn.greeks.live/path/what-is-the-role-of-a-blockchain-in-executing-smart-contracts/)

- [How Might Global Regulatory Divergence Impact the Operations of a Decentralized Autonomous Organization (DAO)?](https://learn.greeks.live/path/how-might-global-regulatory-divergence-impact-the-operations-of-a-decentralized-autonomous-organization-dao/)

- [What Is a Major Challenge in Achieving True Decentralized Governance in DAOs?](https://learn.greeks.live/path/what-is-a-major-challenge-in-achieving-true-decentralized-governance-in-daos/)

- [What Is the Role of Decentralized Autonomous Organizations (DAOs) in Governing and Resolving Disputes Related to Financial Smart Contracts?](https://learn.greeks.live/path/what-is-the-role-of-decentralized-autonomous-organizations-daos-in-governing-and-resolving-disputes-related-to-financial-smart-contracts/)

## Glossar

### [Smart Contracts](https://learn.greeks.live/area/smart-contracts/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Function ⎊ Smart contracts are self-executing agreements with the terms of the agreement directly written into lines of code, residing on a decentralized ledger.

### [Decentralized Autonomous Organization (DAO)](https://learn.greeks.live/area/decentralized-autonomous-organization-dao/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Architecture ⎊ A Decentralized Autonomous Organization represents an organizational architecture governed by code and executed on a blockchain, removing the need for traditional hierarchical management.

## Discover More

### [How Did Decentralized Autonomous Organizations (DAOs) Change Their Security Practices after the Attack?](https://learn.greeks.live/path/how-did-decentralized-autonomous-organizations-daos-change-their-security-practices-after-the-attack/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Did Decentralized Autonomous Organizations (DAOs) Change Their Security Practices after the Attack?](https://learn.greeks.live/wp-content/uploads/2025/10/Telescopic-Antennas-Intersecting-Over-Gritty-Digital-Asset-Settlement-Surface.webp)

DAOs adopted mandatory code audits, formal verification, and safer transfer methods like the CEI pattern.

### [How Do Smart Contracts Contribute to the Efficiency of Decentralized Lending Protocols?](https://learn.greeks.live/path/how-do-smart-contracts-contribute-to-the-efficiency-of-decentralized-lending-protocols/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Do Smart Contracts Contribute to the Efficiency of Decentralized Lending Protocols?](https://learn.greeks.live/wp-content/uploads/2025/10/Layered-Crystalline-Structures-Reflecting-Collateralized-Debt-Obligations-in-Decentralized-Finance-Gateways.webp)

Automation of fund pooling, interest, collateral, and liquidation for fast, trustless, and permissionless borrowing and lending.

### [How Can a Crypto Miner Use Futures Contracts to Hedge Their Revenue?](https://learn.greeks.live/path/how-can-a-crypto-miner-use-futures-contracts-to-hedge-their-revenue/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Can a Crypto Miner Use Futures Contracts to Hedge Their Revenue?](https://learn.greeks.live/wp-content/uploads/2025/10/Intertwined-High-Frequency-Trading-Algorithms-Visualized-Through-Lemniscate-Volatility-Surface-Projections.webp)

By selling a short futures contract, a miner locks in a future selling price for their mined crypto, hedging against price drops.

### [What Is the Role of a Decentralized Autonomous Organization (DAO) in Capturing the Governance Premium?](https://learn.greeks.live/path/what-is-the-role-of-a-decentralized-autonomous-organization-dao-in-capturing-the-governance-premium/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Role of a Decentralized Autonomous Organization (DAO) in Capturing the Governance Premium?](https://learn.greeks.live/wp-content/uploads/2025/10/Decentralized-Autonomous-Organization-Governance-Mechanism-Prototype-for-Binary-Option-Settlement-Layer.webp)

A DAO provides the structured mechanism for exercising meaningful governance rights, managing the treasury, and enhancing investor confidence.

### [How Can a DAO Use an Options-Based Vault to Generate Yield on Its LP Tokens?](https://learn.greeks.live/path/how-can-a-dao-use-an-options-based-vault-to-generate-yield-on-its-lp-tokens/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Can a DAO Use an Options-Based Vault to Generate Yield on Its LP Tokens?](https://learn.greeks.live/wp-content/uploads/2025/10/Polished-Architectural-Finial-Sphere-Interfacing-with-Beige-Casing-High-Frequency-Trading-Mechanism.webp)

Depositing LP tokens into a vault that sells options on the underlying assets, earning both trading fees and option premiums.

### [Can a Smart Contract Control Assets or Call Other Smart Contracts?](https://learn.greeks.live/path/can-a-smart-contract-control-assets-or-call-other-smart-contracts/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Can a Smart Contract Control Assets or Call Other Smart Contracts?](https://learn.greeks.live/wp-content/uploads/2025/10/Metallic-Actuator-Interface-Above-Cryptocurrency-Ledger-Microcontroller-Circuitry-Proximity.webp)

Yes, smart contracts can own assets and interact with other smart contracts, which is a fundamental principle of decentralized applications.

### [What Is the Purpose of a Treasury in a Decentralized Autonomous Organization?](https://learn.greeks.live/path/what-is-the-purpose-of-a-treasury-in-a-decentralized-autonomous-organization/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Purpose of a Treasury in a Decentralized Autonomous Organization?](https://learn.greeks.live/wp-content/uploads/2025/10/Visualizing-Latency-Arbitrage-Within-Decentralized-Autonomous-Organization-Governance-Mechanisms.webp)

The DAO treasury is a community-controlled fund used to finance the project's development and operations via governance votes.

### [How Does the Use of a Smart Contract for Fund Management Affect the Commonality Analysis?](https://learn.greeks.live/path/how-does-the-use-of-a-smart-contract-for-fund-management-affect-the-commonality-analysis/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the Use of a Smart Contract for Fund Management Affect the Commonality Analysis?](https://learn.greeks.live/wp-content/uploads/2025/10/Deconstructed-Decentralized-Finance-Mechanism-Revealing-Embedded-Volatility-Surface-and-Hedging-Instrument-Mechanics.webp)

It strengthens the horizontal commonality argument by automatically pooling funds and executing shared distribution rules.

### [How Are Options Contracts Represented and Executed as Smart Contracts on a Blockchain?](https://learn.greeks.live/path/how-are-options-contracts-represented-and-executed-as-smart-contracts-on-a-blockchain/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Are Options Contracts Represented and Executed as Smart Contracts on a Blockchain?](https://learn.greeks.live/wp-content/uploads/2025/10/Abstract-Visualization-of-Quantized-Settlement-Layer-Edge-Case-Interaction-in-Decentralized-Finance-Protocols.webp)

Options contracts are coded onto a blockchain, with terms and assets locked in for auto-execution.

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