Blockchain and Decentralised Autonomous Organisations (DAOs): The Evolution of Companies?

(2019) 28 New Zealand Universities Law Review 423-458

The University of Auckland Business School Research Paper

29 Pages Posted: 25 Feb 2020 Last revised: 15 Dec 2020

See all articles by Alexandra Sims

Alexandra Sims

University of Auckland Business School

Date Written: November 1, 2019

Abstract

Blockchain’s potential uses are wider than simply cryptocurrencies. Blockchain can and is being used to create Decentralised Autonomous Organisations (DAOs). DAOs represent a radical rethink of how organisations, such as companies, can be structured and run, including changes in ownership, governance, decision-making and profit distribution. DAOs not only lower transaction costs dramatically — and transaction costs are the very reason for a firm’s existence — through their use of smart contracts they can prevent laws and other rules being broken. This article shows that business structures have evolved over the centuries and DAOs are simply another evolution. DAOs require a rethink of the law, including the granting of legal personality to DAOs as well as granting limited liability to DAO token holders.

Keywords: blockchain, Distributed Ledger Technology, DLT, DAO, distributed autonomous organisations, smart contracts, company, corporation, governance, separate legal personality, limited liability

JEL Classification: K22, L22

Suggested Citation

Sims, Alexandra, Blockchain and Decentralised Autonomous Organisations (DAOs): The Evolution of Companies? (November 1, 2019). (2019) 28 New Zealand Universities Law Review 423-458 , The University of Auckland Business School Research Paper, Available at SSRN: https://ssrn.com/abstract=3524674 or http://dx.doi.org/10.2139/ssrn.3524674

Alexandra Sims (Contact Author)

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

HOME PAGE: http://www.business.auckland.ac.nz/people/asim033

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