Towards Governance and Dispute Resolution for DLT and Smart Contracts

Abstract

Illegal content on a blockchain cannot be removed and the originator might not be identifiable. At the same time, node operators that have no control over the content stored on their nodes might be held legally responsible. As a decentralized system, Digital Ledger Technology (DLT) needs decentralized governance and smart contract dispute resolution. Existing DLT governance and dispute resolution is only aimed at balancing the interests of DLT and smart contract participants. It fails to address the interests of third parties and society. The failure to do so could trigger government and court intervention within DLT systems. Although the decentralized nature of a DLT system will offer some protection against this intervention, participants might be identifiable and subject to legal prosecution. We present a design also addressing the interests of society and third parties that will have to be accompanied by an international legal framework.