A first-order design task in blockchain-based decentralized autonomous organizations is to ensure that malicious actors are sanctioned. We show that, when voters act strategically and the system is insufficiently decentralized, payoff-matching bribes undermine the sanctioning of malicious actors under conventional governance. Our framework formalizes DAO voting mechanisms and lets us identify those that mitigate the problem. Stochastic voting decouples a tokenholder’s influence from the voting behavior of others. Thus, bribery-proofness can be restored in the presence of sufficiently centralized governance tokenholders. Alternatively, masked voting increases resilience against bribery. Our work contributes to the broader debate on the merits and pitfalls of decentralization and highlights the need to align governance mechanisms with the degree of decentralization in blockchain networks.
The Author states that Nakamoto combined several prior inventions such as b-money and HashCash to create a completely decentralized electronic cash system that does not rely on a central authority for currency issuance or settlement and validation of transactions.The key innovation was to use a distributed computation system (called a 'proof-of-work' algorithm) to conduct a global 'election' every 10 minutes, allowing the decentralized network to arrive at consensus about the state of transactions.This elegantly solves the issue of double-spend where a single currency unit can be spent twice.Previously, the double-spend problem was a weakness of digital currency and was addressed II The Technology behind BlockchainTo better capture the implications of blockchain applications, it is of utmost importance to start with an understanding of the technology that underpins distributed ledger technology ('DLT') (para.I.A), followed by the key features of blockchain (para.I.B). I.A Distributed Ledger TechnologyGiven the definition of a ledger as an information store that keeps final, definitive, and immutable records of transactions 40 , a distributed ledger is a type of ledger that is shared, replicated, and synchronised in a distributed and decentralised manner 41 .
The private international law rules governing the ownership of shares have long rested on the modalities of their transfer, which afforded considerable significance to the form they take (registered or bearer). This article seeks to demonstrate that this approach, which is of doctrinal origin, does not in reality determine the applicable law, having regard to the objective pursued by company law when it mandates the registered form. In reality, the legal order of the registered office retains today, as it has always done, its authority over the proprietary status of registered shares, regardless of the location of any agent appointed to maintain the register. The mode of representation of the share-including inscription within a distributed ledger technologyshould have no influence on this question. This solution may nonetheless be displaced, from the standpoint of international jurisdiction, by the insolvency of the holder.
The emergence of Decentralized Autonomous Organizations (DAOs) represents a paradigm shift in organizational governance, replacing traditional corporate structures with algorithmically governed models on blockchain networks. This article provides an analysis of the private international law (PIL) challenges posed by the BRICS Pay Consortium, a proposed decentralized payment messaging system for BRICS member states, modeled on DAO principles. The BRICS Pay Consortium DAO highlights a fundamental tension between the transnational and often decentralized nature of blockchain and conventional territorial legal frameworks. The Consortium is designed to operate without a central headquarters or legal personality, thus undermining traditional PIL connecting factors-such as domicile, registered office, and principal place of business-used to determine jurisdiction and applicable law. The article examines divergent global framework for the regulation of DAOs. By evaluating current responses-including statutory legal wrappers and on-chain dispute resolution-this article demonstrates that existing doctrines are inadequate for decentralized entities. It concludes that existing frameworks on jurisdiction and choice of law are currently inadequate for the complexities of the BRICS Pay Consortium DAO. Ultimately, the article argues that resolving these challenges requires a transition from traditional territorial models toward regulatory innovation, contractual best practices, and cross-border cooperation.
Abstract The socio-economic developments and the volume of Decentralized Autonomous Organizations (“DAO”) are increasing day by day. However, debates in the field of law regarding the DAOs are still vigorous. One of the most crucial issues pertaining to DAOs is liability, which is related to their legal nature. Hence, this work first briefly reveals the current liability regime of DAOs within the context of the current landscape of German and Turkish Company Law. Particularly ordinary partnerships, joint-stock companies and limited companies will be examined. Then, the new liability regime for DAOs will be proposed, as a part of the recommendation of a “New Code”. Finally, this work will be concluded with the outcomes and recommendations.
The relevance of this article lies in the existence of over 13,000 decentralized autonomous organizations worldwide, with a total capitalization exceeding 23 billion USD. Numerous projects exploit this form to circumvent regulatory frameworks. At both the international and Ukrainian levels, a coherent understanding of the phenomenon of decentralized autonomous organizations, their objectives, genesis, and legal nature remains absent. The purpose of this article is to explore the genesis and legal nature of decentralized autonomous organizations – from the inception of the technical idea to their transformation into sui generis legal entities. Applying comparative and formal legal methods to examine the development of the legal understanding of these organizations, and employing case study methodology to assess their implementation in practice, the article investigates the main stages of the formation of the modern concept of decentralized autonomous organizations, their differentiation from adjacent constructs – decentralized applications, autonomous agents, and decentralized organizations – by highlighting criteria of autonomy and decentralization, along with case studies from Bitcoin to The DAO. On the basis of a comparative legal analysis of regulatory models in the United States, Europe, and offshore jurisdictions, a conceptual mismatch is identified between classical corporate forms and the ontology of decentralized autonomous organizations. A two-component qualification test is proposed, alongside a typology dividing them into genuine, hybrid, and quasi forms. The findings of the study, together with the identification of practical challenges faced by such projects, substantiate the possibility of recognizing decentralized autonomous organizations as legal persons under Ukrainian law by means of the doctrinal construct of the “personalized purpose” (Zweckvermögen) developed by A. von Brinz, potentially implemented in the form of a foundation. This approach permits the integration of algorithmic will with legal personality without undermining their decentralized nature. The article provides a foundation for further inquiries into specific legal characteristics of decentralized autonomous organizations, including the “sorites paradox” and the prospects for legislative regulation within the Ukrainian legal order based on the doctrine of personalized purpose.
This paper provides a brief history and status of securities legislation in Switzerland. The focus is on the «taken into account effects», which are classified by Swiss law and doctrine as sui generis objects, since by their legal nature they do not relate to things or to claims. The author also evaluates changes in legislation related to the regulation of the use of distributed ledger technology in the area of assignment and circulation of rights. Swiss private law provides issuers with a wide range of alternative forms of issuing securities, which over time creates problems with the formulation of concepts that reflect the essence of new objects. The author draws parallels with Russian dematerialized securities and concludes that Swiss approaches to the dematerialization of securities are not a panacea and cannot provide answers to pressing questions in the domestic doctrine, including what subjective right arises for paperless securities.
The advent of smart contracts has reshaped the dynamics of corporate agreements with the aid of introducing automated, self-executing legal arrangements powered by using blockchain technology. These digital contracts offer great advantages, together with reduced transaction charges, greater transparency, and minimized reliance on intermediaries. However, their integration into corporate agreements provides a range of legal and regulatory challenges that stay unresolved. This paper examines the legal complexities springing up from the usage of smart contracts in corporate environments. It explores their enforceability under existing legal frameworks, highlighting troubles associated with agreement formation, consent, and the interpretation of coded terms. Jurisdictional uncertainty and cross-border enforceability further complicate the legal standing of smart contracts in multinational agreements. The study additionally addresses dispute resolution mechanisms within the context of immutable blockchain statistics, considering whether or not conventional legal remedies are compatible with smart contract structure. It discusses how emerging legal requirements and regulatory responses are shaping the adoption of smart contracts while making sure compliance with contract law principles. Moreover, the paper evaluates real-global programs of smart contracts in company transactions, together with supply chain management, monetary offerings, and decentralized autonomous groups (DAOs). It gives tips for organizations seeking to leverage this technology while mitigating legal dangers through hybrid contract models, legal safeguards, and hazard control frameworks. By means of bridging the gap among technological innovation and legal practice, this research underscores the need for adaptive legal frameworks that balance the performance of automation with the principles of justice, fairness, and duty. Understanding the legal frontiers of smart contracts is important for businesses aiming to harness their capability while navigating the evolving legal panorama of the digital financial system.
Abstract Stablecoins are regulated in the European Union under Regulation (EU) 2023/1114 on Markets in Crypto-assets. That Regulation establishes a bespoke legislative regime for ‘asset-referenced tokens’ and ‘electronic money tokens’. Both are crypto assets, i.e., digital representations of a value or a right that can be transferred and stored electronically using distributed ledger technology or similar technology. Both aim to maintain a stable value by referencing another value or right, a specified asset, pool, or basket of assets. Finally, existing EU financial services legislation covers none of them. This work describes the main features of those crypto assets. Current rules seek to provide legal certainty for issuers of stablecoins in the UE (by imposing a common set of provisions applicable to all of them regarding their authorisation, governance requirements, etc.), give appropriate protection for holders of those crypto assets (by regulating their rights against issuers, the rules applicable to crypto-asset white papers or the marketing communications), or address potential financial stability and monetary policy risks that could arise from their use as a means of exchange (by monitoring or restricting the issuance).
The SNB implements its monetary policy by using several instruments, including repurchase agreement (repo) transactions. The SNB conducted test repo transactions involving tokenised assets and wholesale central bank digital currency. These so-called digital repos were settled on a distributed ledger technology (DLT) infrastructure. The tests revealed that settlement of repos on a DLT-based infrastructure is feasible, and provided insights into the corresponding challenges. Specifically, integrating a DLT-based infrastructure into today's money market as in the test setup presents challenges related to market fragmentation, the need for enhanced collateral management capabilities, and the harmonisation of communication standards.
We study a game-theoretic model for pool formation in Proof of Stake blockchain protocols. In such systems, stakeholders can form pools as a means of obtaining regular rewards from participation in ledger maintenance, with the power of each pool being dependent on its collective stake. The question we are interested in is the design of mechanisms, i.e., "reward sharing schemes," that suitably split rewards among pool members and achieve favorable properties in the resulting pool configuration. With this in mind, we initiate a non-cooperative game-theoretic analysis of the well known Shapley value scheme from cooperative game theory into the context of blockchains. In particular, we focus on the oceanic model of games, proposed by Milnor and Shapley (1978), which is suitable for populations where a small set of large players coexists with a big mass of rather small, negligible players. This provides an appropriate level of abstraction for pool formation processes that occur among the stakeholders of a blockchain. We provide comparisons between the Shapley mechanism and the more standard proportional scheme, in terms of attained decentralization, via a Price of Stability analysis and in terms of susceptibility to Sybil attacks, i.e., the strategic splitting of a players' stake with the intention of participating in multiple pools for increased profit. Interestingly, while the widely deployed proportional scheme appears to have certain advantages, the Shapley value scheme, which rewards higher the most pivotal players, emerges as a competitive alternative, by being able to bypass some of the downsides of proportional sharing in terms of Sybil attack susceptibility, while also not being far from optimal guarantees w.r.t. decentralization. Finally, we also complement our study with some variations of proportional sharing, where the profit is split in proportion to a superadditive or a subadditive function of the stake, showing that our results for the Shapley value scheme are maintained in comparison to these functions as well.
Decentralized Autonomous Organizations (DAOs), novel organizational structures governed by smart contracts on a blockchain, present a profound challenge to established legal paradigms. Designed to be borderless, transparent, and autonomous, DAOs operate in inherent conflict with a global legal system predicated on territorial jurisdiction and centralized authority. This article provides an exhaustive analysis of the treatment of DAOs under private international law (PIL). It begins by examining the fundamental crisis of legal categorization, where „unwrapped” DAOs face a default classification as general partnerships, imposing unlimited personal liability on their members—a risk starkly illustrated by landmark litigation such as CFTC v. Ooki DAO. The analysis then delves into the core tenets of PIL, demonstrating the inadequacy of traditional connecting factors for determining jurisdiction and applicable law in a decentralized context and exploring the formidable challenges of enforcing judgments against on-chain assets. Through a comprehensive comparative analysis of emerging regulatory frameworks in the United States (Wyoming), the European Union (MiCA), Switzerland (DLT Act), Liechtenstein (Blockchain Act), and the United Kingdom (Law Commission proposals), this article maps the fragmented global response. It argues that the adoption of „legal wrappers” is not merely a corporate structuring choice but a strategic PIL maneuver to preempt legal uncertainty. The article concludes that the legal landscape is evolving from a simple question of „what is a DAO?” to a complex, second-generation PIL problem of „which DAO law applies?” It posits that the future lies not in the triumph of code over law, but in a hybrid synthesis, and calls for international cooperation to develop coherent principles that can guide the integration of these transformative entities into the global legal order.
W artykule autor poddaje analizie możliwość zastosowania technologii rejestru rozproszonego do prowadzenia rejestru akcjonariuszy w polskim prawie handlowym. Jako źródło rozważań autor przyjął nowo dodaną do polskiego porządku prawnego prostą spółkę akcyjną, w której rejestr akcjonariuszy może być prowadzony właśnie z wykorzystaniem analizowanej technologii. Poczynione rozważania ukierunkowane są na przedstawienie zalet oraz wyzwań, z którymi musi się zmierzyć nowa technologia, a także na przedstawienie możliwości jej stosowania w amerykańskim prawie spółek.
Maruf Ahmed Mridul, Kaiyang Chang, Aparna Gupta, Oshani Seneviratne
The global financial landscape is experiencing significant transformation driven by technological advancements and evolving market dynamics. Moreover, blockchain technology has become a pivotal platform with widespread applications, especially in finance. Cross-border payments have emerged as a key area of interest, with blockchain offering inherent benefits such as enhanced security, transparency, and efficiency compared to traditional banking systems. This paper presents a novel framework leveraging blockchain technology and smart contracts to emulate cross-border payments, ensuring interoperability and compliance with international standards such as ISO20022. Key contributions of this paper include a novel prototype framework for implementing smart contracts and web clients for streamlined transactions and a mechanism to translate ISO20022 standard messages. Our framework can provide a practical solution for secure, efficient, and transparent cross-border transactions, contributing to the ongoing evolution of global finance and the emerging landscape of decentralized finance.