Course

DeFi, Smart Contracts & DAOs

How code replaces the middlemen: DeFi’s building blocks and risks, the classic smart-contract bugs, and how DAOs govern themselves and get attacked.

Intermediate–Advanced3 units · 13 lessons~30 min

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DeFi = financial services built from smart contracts — no bank/broker; the protocol’s code enforces the rules.
Building blocks: lending protocols, AMMs/DEXes (liquidity pools), yield, staking, governance tokens.
AMMs price via a pool formula (e.g. constant-product x·y=k); LPs earn fees for supplying liquidity.
Risks: smart-contract bugs, impermanent loss, oracle manipulation, liquidation, composable/cascading failures, regulatory uncertainty.
Every yield comes from somewhere — if you can’t explain it, you may be the source of someone else’s.

A smart contract is code deployed to a chain that executes automatically when called; the contract address holds state and code.
Solidity (Ethereum and EVM chains) is the dominant smart-contract language: state variables, functions, modifiers, and events.
The "spot the bug" snippets cover the four classic vulnerability classes: reentrancy, integer overflow (pre-0.8), access control, and front-running/MEV.
Reentrancy — a callback re-enters the contract before state updates settle — is the most famous class (the DAO hack, 2016).
Audits, formal verification, and battle-tested libraries (OpenZeppelin) reduce but never eliminate risk; immutability means bugs are forever.
Smart contracts are the substrate for DeFi, DAOs, NFTs, and most of what makes crypto programmable — and most of what makes it dangerous.

A DAO coordinates people, rules, and funds via smart contracts and token-holder votes — replacing (some) corporate structure with code.
Voting designs span token-weighted (1 token = 1 vote), quadratic (favoring breadth over wealth), and conviction (rewarding persistent preference). Each has tradeoffs.
Treasuries hold protocol-owned assets under governance control; mismanaged or captured treasuries are a top attack vector.
On-chain voting is expensive, so most DAOs use off-chain Snapshot signaling and reserve on-chain execution for what passes.
Known attacks: flash-loan governance captures (borrow voting power for one tx), plutocracy (whale dominance), and low-turnout captures.
DAOs are powerful but experimental; legal status (are they general partnerships? liability shields?) remains unsettled in most jurisdictions.