DAOs Can Effect ‘Cultural Shift’ Toward Transparency and Efficiency, Says Industry Executive

When decentralized autonomous organizations (DAOs) first emerged a couple of years ago, many were talking about a paradigm shift in organization. Acting as internet-native entities, DAOs are founded and run entirely on open-source software protocols run on public blockchains like Ethereum.

Through these transparent systems, DAOs allow coordinated groups to self-govern with minimal oversight. Members collectively propose and vote on decisions, enacting changes through coded rule sets without a traditional hierarchy. A living embodiment of the common blockchain maxim of “code is law” — with all its limitations.

DAOs Still Exist in a Legal Gray Area

While still an emerging concept, DAOs represent a major shift in how organizations can be structured and operate, say their champions. Proponents argue their decentralized nature makes DAOs more resilient, equitable, and efficient.

However, critics point to risks around the security of smart contracts, accountability, and legal uncertainty.

Yet, in the view of Angie Malltezi, COO of Web3 startup Shipyard Software, one of the greatest hurdles is regulation. Currently, most regulatory issues facing DAOs at present revolve around determining their legal status and responsibilities within different jurisdictions, Malltezi told BeInCrypto.

Put simply, we’re still not entirely sure what they are.

“DAOs present challenges in terms of identifying the issuing group’s location and intentions, as well as understanding how the DAO operates and behaves,” Malltezi said.

“The lack of a centralized authority and the global nature of DAOs make it difficult to establish clear legal boundaries and determine liability when issues arise. The intent behind creating a DAO and its actual usage are key factors that regulatory bodies consider when assessing the l

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Author: Josh Adams

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