Decentralised Autonomous Organisations and the Corporate Form

  • Nathan Tse

Abstract

It has been suggested that the development of decentralised autonomous organisations (DAOs) will lead to a paradigm shift in the way we perceive businesses. DAOs ostensibly eliminate agency costs due to the absence of a board of directors, automated governance mechanisms and transparency provided by the blockchain upon which the DAO is launched. This article undertakes a comparative analysis between DAOs and corporations and questions whether DAOs really do improve the corporate form. Using a corporate governance and legal realist lens, this article suggests that a number of the purported benefits of DAOs are overly simplified. Moreover, there are several practical and legal obstacles that technological advancements and improved engineering must overcome before DAOs become a viable, mainstream organisational structure. Balancing the inevitable improvement in technology against these significant obstacles, this article predicts an incremental integration of DAOs into society through a hybrid approach, involving interim legal solutions and varying degrees of automation and decentralisation.

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Published
2020-09-01
How to Cite
TSE, Nathan. Decentralised Autonomous Organisations and the Corporate Form. Victoria University of Wellington Law Review, [S.l.], v. 51, n. 2, p. 313-356, sep. 2020. ISSN 1171-042X. Available at: <https://ojs.victoria.ac.nz/vuwlr/article/view/6573>. Date accessed: 21 sep. 2020. doi: https://doi.org/10.26686/vuwlr.v51i2.6573.