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ABSTRACT
Blockchain technology and smart contracts are catalysts for decentralization and disintermediation. These new technologies reduce transaction costs, agency costs, and offer a basis for trustless social and economic interactions. They are fueling new business models for decentralized platforms and have revolutionized crowdfunding. A recent trend, Decentralized Autonomous Organizations (DAOs), stands to fundamentally transform organizing and governance. DAOs are blockchain-native, decentralized organizations that are collectively owned and managed by their members via smart contracts. In this note, we assess the promises and challenges of DAOs, with a focus on decentralized governance and disintermediation, and offer a first empirical glimpse at the rise and functioning of DAOs. Overall, DAOs may introduce a new era in organizational economics, transforming the global corporate landscape from hierarchical organizations to democratic and distributed organizations powered by organizational entrepreneurship and innovations.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
2. For example, the U.S. Congress has introduced a bill to break up large tech firms. For more information see here: https://www.cnn.com/2021/06/11/tech/house-tech-antitrust-bills/index.html.
3. For example, Google has been fined by the European antitrust for unfair market practices. For more information see here: https://www.nytimes.com/2021/11/10/business/google-eu-appeal-antitrust.html.
4. The bill is available at: https://www.wyoleg.gov/Legislation/2021/SF0038.
5. For more details see here: https://legislature.vermont.gov/statutes/section/11/025/04173.
6. The website https://dao-analyzer.science/daohaus was accessed for the purpose of data extraction over a period of several days in the first two weeks of March 2022. Note that the website is still under construction and therefore appearance and data coverage are dynamically changing.
7. Available from https://coinmarketcap.com/view/dao/, accessed the last time on May 11, 2022.
8. Also retrieved in March 2022 from https://snapshot.org/#/.
9. As of March 14, 2022, there are at least 4,832 DAOs created as per https://deepdao.io/.
10. These graphs are based on the DAO index published by Coinmarketcap as of March 25, 2022, retrieved from https://coinmarketcap.com/view/dao/, with the historic price and trading volume information obtained from https://www.coingecko.com/.
11. USD 9,675 as of March 14, 2022, see https://coinmarketcap.com/currencies/cook-protocol/.
12. For details, see https://ethereum.org/en/dao/.
13. See here https://docs.snapshot.org/strategies/what-is-a-strategy, retrieved March 14, 2022.
14. See here: https://oceanprotocol.com/dao, information retrieved on March 14, 2022.