Decentralized Autonomous Organizations (DAOs): Catalysts for enhanced market efficiency

Baptiste Perez Riaza and Jean-Yves Gnabo

Finance Research Letters, 2023, vol. 58, issue PB

Abstract: The crypto-asset market has shown variations in efficiency across assets and time, but limited research has explored the driving factors beyond liquidity. Exploiting a dataset of 122 crypto-assets, with imbalanced data, this study investigates the impact of market conditions and inherent asset characteristics on return predictability. Our findings reveal that both factors significantly influence the efficiency of crypto-assets. Notably, Decentralized Autonomous Organizations (DAOs) exhibit higher efficiency compared to non-DAO projects. This suggests that transparent decentralized decision-making models can reduce information asymmetry, leading to a more efficient market pricing. Furthermore, we show a positive relationship between market efficiency and increased liquidity and age. These insights shed light on the role of DAOs as catalysts for enhancing market efficiency and have important implications for investors and market participants in the crypto-asset market.

Keywords: Crypto-assets; Efficiency; DAO; Taxonomy (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323008176

DOI: 10.1016/j.frl.2023.104445

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