Decentralized Autonomous Organizations (DAOs)

Abstract

Abstract This chapter covers the innovative concept of decentralized autonomous organization (DAO). DAO refers to a system or arrangement for distributed decision-making which typically relies on or is underpinned by a computer program or a compilation of computer programs. The DAO essentially consists of computer codes that exist virtually on the relevant blockchain or other distributed ledger which codes are typically open sourced. The chapter then provides an overview of the potential legal and regulatory implications for the DAO and other DAOs within the context of UK and EU investment fund regulation. It highlights the considerable uncertainty regarding how the DAO should be treated from a legal and regulatory perspective.