The European Banking Institute recently published an academic paper exploring Decentralized Autonomous Organizations (DAOs). Instead of creating companies or partnerships, the crypto community maximizes the use of smart contracts to manage their organizations, automating much of the functionality.
If you’ve ever explored DAOs, you’ll agree with the paper’s authors that every DAO is different. They conclude that cost saving is the primary motivation for using a DAO structure – beyond ideology. The authors also note that previous exploration has focused on the legal disadvantages of a DAO. They acknowledge those weaknesses but also see some benefits they believe have been overlooked.
Most papers on DAOs solely look at the ins and outs of the legal structure or lack thereof. This paper also explores DAOs from a nonlegal context of the “Theory of the Firm.”
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