Definition ∞ A fund smart contract is a self-executing agreement on a blockchain that manages and distributes digital assets according to predefined rules. These contracts can pool capital from multiple participants for investment purposes, automate dividend distributions, or govern the allocation of resources within a decentralized autonomous organization (DAO). They remove the need for intermediaries by programmatically enforcing the terms of a financial arrangement.
Context ∞ News often highlights the creation of new decentralized investment vehicles or DAOs that rely on fund smart contracts for transparent and automated asset management. The discussion frequently involves the security audits and legal interpretations surrounding these contracts, especially concerning investor protections. Future developments include more sophisticated and customizable fund smart contract architectures, enabling a broader array of decentralized financial products.