A Web3 protocol is an open specification, implemented on a blockchain, that defines how independent parties read state, submit transactions, and change that state via smart contracts. It removes the need for a central operator by relying on cryptographic signatures, transparent rules, and the base chain’s consensus.
The protocol exposes callable functions and events. Any wallet or app can interact by signing requests and paying network fees. Security comes from audited code, the blockchain’s consensus, and the economic design that aligns incentives and resists abuse.
A DAO is the on-chain governance layer for a protocol. Token holders or delegates propose and vote on changes, control the treasury, and authorize new contract deployments, providing transparent, programmable governance.
Rules can be upgraded through on-chain voting or maintainers releasing new contract versions. Because interfaces and state are public, protocols compose with each other, which lets developers combine tokens, exchanges, lending, naming, identity, or storage into new services.