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Control of Decentralized Autonomous Organizations

Author

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  • Ian Appel
  • Jillian Grennan

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 smart contracts, 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 of entities, often three or fewer, exert control over most decisions.

Suggested Citation

  • Ian Appel & Jillian Grennan, 2023. "Control of Decentralized Autonomous Organizations," AEA Papers and Proceedings, American Economic Association, vol. 113, pages 182-185, May.
    • Handle: RePEc:aea:apandp:v:113:y:2023:p:182-85
    DOI: 10.1257/pandp.20231119
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    Cited by:

    1. Benjamin Lester, 2024. "It’s Not Just Who You Know, It’s How You Know Them," Economic Insights, Federal Reserve Bank of Philadelphia, vol. 9(1), pages 12-17, March.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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