Control of Decentralized Autonomous Organizations

9 Pages Posted: 12 Jan 2023

See all articles by Ian Appel

Ian Appel

UVA Darden

Jillian Grennan

Santa Clara University, Leavey School of Business; Santa Clara University School of Law; University of California, Berkeley, Haas School of Business, Institue for Business and Social Impact

Date Written: January 11, 2023

Abstract

Blockchain technology has facilitated the emergence of a new type of organizational form, Decentralized Autonomous Organizations (DAOs). In contrast to corporations and other types of business organizations, DAOs do not have managers or directors with formal decision rights. Instead, the members of DAOs collectively make decisions by voting on proposals. The governance process is encoded and executed via a smart contract, negating the need for centralized leadership. We examine the control of DAOs by analyzing 10,639 proposals across 151 DAOs. We find that, rather than democratizing decision-making, a small number, often three or fewer, of entities exert control over most decisions.

Keywords: Blockchain, Decentralized Autonomous Organizations, Decentralized Finance, Stablecoins, Entrepreneurship, Organizational Economics, Corporate Governance, Political Economy

JEL Classification: O30, G34, M10, M50

Suggested Citation

Appel, Ian and Grennan, Jillian, Control of Decentralized Autonomous Organizations (January 11, 2023). Available at SSRN: https://ssrn.com/abstract=4322917 or http://dx.doi.org/10.2139/ssrn.4322917

Ian Appel

UVA Darden ( email )

United States

Jillian Grennan (Contact Author)

Santa Clara University, Leavey School of Business ( email )

Santa Clara, CA 95053
United States

Santa Clara University School of Law ( email )

500 El Camino Real
Santa Clara, CA 95053
United States

University of California, Berkeley, Haas School of Business, Institue for Business and Social Impact

Berkeley, CA 94720
United States

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