DECENTRALIZED AUTONOMOUS ORGANIZATIONS AS THE NEW FORM OF ECONOMIC COOPERATION IN DIGITAL WORLD

Denys Virovets () and Sergiy Obushnyi ()
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Denys Virovets: Borys Grinchenko Kyiv University, Kyiv, Ukraine
Sergiy Obushnyi: Borys Grinchenko Kyiv University, Kyiv, Ukraine

The USV Annals of Economics and Public Administration, 2020, vol. 20, issue 2(32), 41-52

Abstract: This paper draws the concept of the decentralized autonomous organizations (DAO) as new opportunities for digital economy and new form of digital cooperation with economic potential of DAO, as well as reveals the main problems and risks associated with functioning of DAO. Quick development of technology and digitalization of society, increase in the number of modern electronic devices will lead to new forms of cooperation, where borders and distances will not be an obstacle to combining human efforts and resources. One of the forms of such cooperation should be DAO as a reliable and effective substitute for the institution of economic mediation and traditional legal forms. Despite the attractive optimization of a number of processes due to digital freedom and low bureaucracy, a number of issues related to protocol security, legal uncertainty and temporary complexity of the internal mechanism remain unresolved. Modern technology based on blockchain represents the opportunities for capital formation with new organizational form as DAO, where transferred digital assets and cryptocurrencies can be administrated by internal governance structure or with participation of another compatible DAO. . That allows the creation of organizations where the governance is based on formalized rules and direct real-time control on funds with the processes are automated using software. Experiments with DAOs have been going on for over six years and are accompanied by discussions about their automated structure and mechanisms for capital accumulation. It is believed that future opportunities will lie in the formation of new types of organizations based on digital interaction of stakeholder s and decentralized governance. Despite the potential of such form of cooperation, there are unresolved problems of legislative regulation, security and governance. We are convinced that new forms of economic cooperation based on blockchain and DAO technologies may open up shortcomings in the near future, and we know how to implement them in national platforms adapted to modern legislation that promotes economic progress and global cooperation. Also we believe that DAO should become a separate economic system based on the idea of Seconomics end Robonomics, where the digital economy is seen as an integral part of CyberSecurity.

Date: 2020
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