DAOs and the History of Corporate Law

Abstract Decentralized autonomous organizations (DAOs) can replicate certain features of the modern business corporation—notably a crypto-asset “capital lock-in” and participatory governance based on token-holder “democracy.” The history of corporations can be traced back to Roman law and beyond. However, with increasing industrialization, the nineteenth century was to become the century of free and general incorporation, leaving behind the restrictive charter system. Rampant abuse and speculation as well as widespread fraud and corruption at the beginning did not prevent limited liability corporations from being hailed as “the greatest single discovery of modern times” only a generation later. This chapter seeks to ascertain whether and to what extent the history of corporate law can provide valuable lessons for the design and implementation of adequate legal frameworks for capturing the DAO phenomenon. It argues for an incremental approach that gradually seeks to accommodate the concept of DAOs within existing legal frameworks. This will more readily allow for fostering innovation whilst curbing the propensity for abuse.