Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300237 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
IU Discussion Papers - Business & Management No. 6 (Juni 2024)
Publisher: 
IU Internationale Hochschule, Erfurt
Abstract (Translated): 
Distributed Ledger Technologies (DLT) and their most prominent version, the blockchain, enable a new type of organization: Decentralized Autonomous Organizations (DAOs). DAOs consist of software code, mainly smart contracts, and the DAO members. Members keep governance tokens that grant property rights, e.g. voting rights. DAOs are featured by anonymity of their members and zero hierarchy coordination. Subsequently, DAOs are predestined for shaping web3 communities, managing decentralized applications (dApps) and operating digital business of any kind in the future. In last instance, DAOs may be entirely autonomous due to fully automated smart contracts. Since DAOs operate on blockchains, they are far from day-to-day bureaucracy and formal legal requirements. Seen from a common business point of view, startups and entrepreneurs might criticize a lack of structure and decency of DAOs. Moreover, it has been reported that U.S. authorities sued and made DAO initiators and token owners personally liable for violating federal law. This discussion paper describes essential features of DAOs and discusses major characteristics of a business firm. Moreover, the author points at favourable U.S. locations for setting up a DAO with a LLC body, however still keeping core web3 features such as its decentralized mode of operation and anonymity for token owners.
Subjects: 
Startups
Web3
Distributed Ledger Technologies
Blockchain
Tokenization
Decentralized Autonomous Organization
DAO
Wyoming
LAO
JEL: 
K00
L20
L22
L26
M13
N40
O17
O32
O33
O35
O38
Document Type: 
Working Paper

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