Decentralised Autonomous Organization (DAO): A Revolution of Trust in Digital Networks?

Cyril Chambefort and Magali Chaudey
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Cyril Chambefort: GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - EM - EMLyon Business School - CNRS - Centre National de la Recherche Scientifique
Magali Chaudey: GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - EM - EMLyon Business School - CNRS - Centre National de la Recherche Scientifique

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Abstract: The paper studies DAOs (Decentralized Autonomous Organizations), which are based on blockchain technology, emphasizing that they rely on a complex, multi-level trust framework that extends beyond purely technological trust. We define DAOs as digital blockchain-based organizations powered by open virtual networks of contributors. Their coordination and management are decentralized, without any central control. This structure allows peers to work autonomously on a token-based system of on-chain coordination, where rules are self-executed using smart-contracts and off-chain coordination mechanisms. The study of DAOs reveals the emergence of a particular form of trust, "trust in code". Our contribution is threefold: First, we provide an empirical study of Uniswap DAO, the largest decentralized finance network. Secondly, we demonstrate that a complementarity exists in the notion of trust production in such networks, which includes trust in technology, but also personal trust developed outside the blockchain. Finally, the study of this particular network, combining multi-level trust, leads us to explore approaches in terms of social capital. Our description of the Uniswap network suggests that it both requires and enables the accumulation of social capital, in its relational, structural, and cognitive dimensions.

Keywords: Blockchain; Smart-contract; DAO (Decentralised Autonomous Organisation); Uniswap; Trust (search for similar items in EconPapers)
Date: 2024-10-18
Note: View the original document on HAL open archive server: https://hal.science/hal-04743423v1
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