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6.2 Force Liquidation
The process of liquidation typically involves the creation of a smart contract that holds the DAO’s funds, and then sets out a set of rules for how those funds will be distributed. These rules can include conditions such as time limits, minimum amounts, and conditions for withdrawing the funds. Once the conditions are met and the funds are withdrawn, the DAO is effectively liquidated and the funds can be used for other purposes.
The use of smart contracts for liquidation helps to ensure that the funds are distributed in a fair and transparent manner, and that the rules governing the liquidation process are followed. Additionally, the use of smart contracts allows for the funds to be distributed quickly and securely, without the need for human intervention.