Making Decentralized Autonomous Organizations (DAOs) fit for legal life: mind the gap

Oscar Borgogno ()
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Oscar Borgogno: Bank of Italy

No 718, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Decentralized Autonomous Organisations (DAOs) can be understood as collective organizations that are run through blockchain-based smart contracts, which allow token holders to participate directly in decision-making processes. By harnessing the key features of distributed ledger technology (DLT), they are increasingly posing tricky questions for policy makers, supervisors, and legal scholars. Even though DAOs are often claimed to be beyond the reach of national jurisdictions, it is clear that a broad array of legal issues need to be solved for DAOs to achieve scalability and widespread application, namely the lack of limitation of liability, governance concerns, and the definition of token-holders’ rights. Our paper delves into these concerns and argues that DAOs can benefit from the solutions provided by corporate law over the past decades in coping with management and moral hazard problems involving all complex organizations.

Keywords: blockchain; DAOs; decentralization; corporate governance; tokens (search for similar items in EconPapers)
JEL-codes: G34 K22 L22 (search for similar items in EconPapers)
Date: 2022-10
New Economics Papers: this item is included in nep-law, nep-mfd and nep-pay
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Citations: View citations in EconPapers (2)

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