What Are the Key Differences between a DAO’s Smart Contract-Based Governance and Traditional Corporate Governance?

The primary difference is automation and decentralization versus hierarchy and manual enforcement. DAOs use transparent, self-executing smart contracts to enforce rules, where voting is direct and outcomes are automatically implemented.

Traditional corporations rely on a hierarchical structure (e.g. board of directors, executives) to make decisions, which are executed through manual, often opaque, legal and administrative processes. In a DAO, rules can only be changed by a member vote, whereas corporate rules can often be altered by leadership.