Oscar Borgogno (Banca d'Italia)
Decentralized Autonomous Organisations (DAOs) can be understood as collective organizations that are run through blockchain-based smart contracts, which allow token holders to participate directly in decision-making processes and decentralize entrepreneurial activities as much as possible. The advocates of this new kind of digital organization argue that DAOs enjoy significant operational efficiencies compared to traditional legal entities. This paper provides a critical overview of the main legal and organizational features that may prevent DAOs from scaling up and delivering on their promises, namely their legal status and liability regime. Based on a comparative analysis of major legislative initiatives on the subject in different jurisdictions, we argue that many solutions developed by corporate law (such as proxy voting and limited liability) could prove useful in reducing financial risks for DAO members and stakeholders.