Blockchain and Decentralised Autonomous Organisations (DAOs): The Evolution of Companies?
(2019) 28 New Zealand Universities Law Review 423-458
29 Pages Posted: 25 Feb 2020 Last revised: 15 Dec 2020
Date Written: November 1, 2019
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: Suggested Citation