The Nature of the Dao
18 Pages Posted: 26 Apr 2024
Abstract
Using the Coasean theory of the firm, this paper explores the concept of decentralised autonomous organisations (DAOs), which are blockchain-based organisations that are intended to operate without a central authority or management hierarchy. The paper compares and contrasts DAOs with a stylised notion of ‘centralised autonomous organisations’ (CAOs), which are defined as being conventional organisations that rely on bureaucratic systems and human authority. DAOs may have the potential to outperform CAOs in some situations, but as yet there are many open questions and uncertainties about their viability and impact. The paper isolates the crucial assumption underpinning the viability of DAOs as being that DAOs must suppress agency costs. Whether they do so is an empirical question that remains to be answered.
Keywords: Centralised Autonomous Organisation, Decentralised Autonomous Organisation, Governance, Management, New Institutional Economics
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