Decentralized Autonomous Organizations Research Articles

Article: Income Tax Considerations Pertaining to Decentralized Autonomous Organizations (DAOs)

Over the last couple of years, an increasing number of organizations have arisen that are native to blockchain technology. Recent data shows that these decentralized autonomous organizations (DAOs) that are essentially ‘living on the blockchain’ are becoming increasingly popular. They are attracting substantial amounts of funds, operating both in the Web3 space and off-chain, and creating a significant source of novel tax issues. The existing tax academic research on DAOs is often limited to US domestic tax issues following from the DAO’s legal treatment. This article outlines (part of) the existing income tax landscape for the DAOs and some of the arising income tax challenges. The focus is on the general principles of domestic and international income tax systems. The authors argue that the DAOs create fundamental and practical tax issues potentially leading to income taxed ‘nowhere’. Existing tax frameworks cannot fully embed the DAOs and allow them to maintain their distinguishing features. The incorporation of DAOs does not necessarily solve the tax issues and even exacerbates them in certain cases. The authors call upon domestic and international legislators and policymakers to aim for more tax certainty for shareholders and further tax research of the DAOs.

Tax Challenges and Potential Opportunities Arising from Decentralized Autonomous Organizations

In this article, the author discusses how decentralized autonomous organizations (DAOs), as blockchain-based electronic entities, are well-suited to a global digital economy. While challenges related to taxation persist, the author highlights the potential for more efficient tax collection in a digitally integrated world.

Исследование распределения контроля и метрик разнообразия в децентрализованных автономных организациях

This study empirically investigates the distribution of control and diversity in decentralized autonomous organizations (DAOs) on the Ethereum blockchain. It uses a number of measures-the Nakamoto coefficient, Gini coefficient, Her-findahl-Hirschman index, Theil index, Shannon entropy, and Simpson diversity index-to assess decentralization and fairness in the distribution of control tokens. The analysis reveals a complex landscape in which some DAOs exhibit decentralization with diversity in the distribution of control, while others exhibit significant concentration of power and inequality in the distribution of power. A key observation is the coexistence of a broad distribution of control among EOA addresses with significant inequality in the ownership of control tokens. This indicates that a broad distribution of control does not always correlate with a fair distribution of management tokens. The study also highlights the possibil-ity of delegation mechanisms that may lead to a more equitable distribution of power compared to direct representa-tion. This study provides insight into the governance dynamics of DAOs by demonstrating the complex multi-level bal-ance between decentralization and centralization in a decentralized technology infrastructure.

Location factors and ecosystem embedding of sustainability-engaged blockchain companies in the US. A web-based analysis

While many digital technologies provide opportunities for creating business models that impact sustainability, some technologies, especially blockchain applications, are often criticized for harming the environment, e.g. due to high energy demand. In our study, we present a novel approach to identifying sustainability-focused blockchain companies and relate their level of engagement to location factors and entrepreneurial ecosystem embeddedness. For this, we use a large-scale web scraping approach to analyze the textual content and hyperlink networks of all US companies from their websites. Our results show that blockchain remains a niche technology, with its use communicated by about 0.6% of US companies. However, the proportion of blockchain companies that are committed to sustainability is significantly higher than in the overall firm population. Additionally, we find that such sustainability-engaged blockchain companies have, at least quantitatively, a more intensive embedding in entrepreneurial ecosystems, while infrastructural and socio-economic location factors hardly play a role.

Customized decentralized autonomous organization based optimal energy management for smart buildings

In recent years, the unprecedented rising urbanization level and proliferation of distributed energy sources (DES) are motivating the transition of smart building from consumer to prosumer. In the context of mitigating upstream emission via reducing reliance on utility grids, the key challenge becomes realizing autonomous and economically optimal energy management within smart buildings. This paper innovatively proposes a Decentralized Autonomous Organization (DAO)-based energy management framework for smart buildings, where the mechanism of day-ahead scheduling DAO considering peer-to-peer (P2P) energy sharing is specifically investigated. Besides, a sequential preference satisfaction mechanism is designed to customize participants’ special demands, thereby achieving effective energy matching. Considering potential communication failures between buildings in practical operations, this study develops a communication failure robust distributed algorithm to minimize operational costs and safeguard building’s privacy. Extensive numerical studies for highly DES penetrated smart buildings successfully offers an operation cost reduction of 33.7% when considering preference satisfaction and P2P energy sharing in the day-ahead scheduling problem. Simulation results also demonstrates that the algorithm in this work excels in resisting potential communication failure during operation.

Blockchain, tokens, smart contracts, and “decentralized autonomous organization”: Expanding and renewing the mechanisms of governance?

AbstractBlockchain, tokens, smart contracts, and decentralized autonomous organization (DAO) are increasingly shaping discussions in media and research. The aim of this contribution is to explore how governance theory can clarify these concepts and how the application of theory to this new problem can also enrich governance theory itself.We focus on the technical environment (blockchain and tokens) that is at the heart of this new form of organization. By exploiting the intrinsic attributes of blockchain (decentralization, immutability, and transparency), smart contracts and DAOs are coordination mechanisms that expand the possibilities of interagent interactions and horizontal coordination, eliminating information asymmetries and the need for trusted third parties. In addition, by taking advantage of the transparency and immutability inherent in blockchain, smart contracts and DAOs make it possible to find and record agreements securely, automating contractual clauses.We argue that these technologies have a significant potential to renew the contractual approach to governance and to overcome some of the limitations of traditional theory.

Proof-of-Stake Non-Fungible Tokens, the Distributed Autonomous Organization, and the Valuation of Art: A Proposal for a Nonprofit, Community Controlled NFT

Abstract This paper describes a way to use blockchain-based non-fungible tokens (NFTs) to address some fundamental failures of the art world introduced when the early-twentieth-century evolution of financial markets expanded to include objets d’art as commodities. It proposes the creation of a distributed autonomous organization (DAO) that uses domain experts’ Delphic consensus methods embedded in smart contracts to provide NFTs with meaningful nonfinancial assessments of intrinsic artistic qualities and merit. Full details of the blockchain implementation and organizational development are online, registered at https://doi.org/10.17605/OSF.IO/3DF4W with the Open Science Foundation as a large-scale participant/observer social science experiment.

The Illusion of Community in Decentralized Autonomous Organizations (DAOs): Why Members Disengage

The Illusion of Community in Decentralized Autonomous Organizations (DAOs): Why Members Disengage

A blockchain-based solution for transparent intellectual property rights management: smart contracts as enablers

PurposeThe purpose of this study is to address the limitations of traditional methods for managing intellectual property rights (IPRs) by proposing a blockchain-based solution. By leveraging blockchain technology and smart contracts, the aim is to create a comprehensive ecosystem that offers advantages such as reduced transaction costs, improved transparency, enhanced security and increased liquidity levels for IP assets.Design/methodology/approachThis paper proposes using blockchain technology to manage intellectual property rights (IPRs) through a smart contract-based ecosystem. It outlines the use of non-fungible tokens (NFTs) on the blockchain to represent IPRs, with smart contracts automating interactions and encoding rules for various processes such as applications, licensing, transfers and royalty distribution. Governance mechanisms, such as decentralized autonomous organizations (DAOs), are employed to allow stakeholders to propose and vote on contract changes, ensuring adaptability. This approach aims to streamline IPR workflows, reduce transaction costs, improve transparency and enhance security.FindingsThe findings of this study suggest that implementing a blockchain-based ecosystem for managing intellectual property rights (IPRs) can lead to various benefits. These include reduced transaction costs, improved transparency, enhanced security, increased liquidity levels for IP assets and streamlined automated processes. The use of non-fungible tokens (NFTs) on the blockchain allows for detailed management, valuation and trading of IPRs. Furthermore, simulation results demonstrate the robustness and efficiency of our proposed ecosystem, outperforming traditional IP management systems in terms of transaction speed and cost-effectiveness. These simulations highlight the practical viability of integrating blockchain technology into IP management workflows.Practical implicationsThe practical implications of adopting this blockchain-based ecosystem for managing intellectual property rights (IPRs) are significant. By streamlining processes, reducing transaction costs and improving transparency and security, organizations can expedite the protection and commercialization of their IP assets. Additionally, the increased liquidity levels and accessibility of IP assets to investors and financiers can spur innovation and economic growth.Originality/valueThis paper contributes to the field by proposing a novel approach to managing intellectual property rights (IPRs) using blockchain technology and smart contracts. By leveraging non-fungible tokens (NFTs) on the blockchain, the proposed ecosystem offers a more efficient and transparent way of managing IPRs, reducing reliance on costly and opaque traditional methods. The potential benefits include improved efficiency, transparency, security and collaboration in the management and commercialization of IPRs.

Kaizen: A Street Smart Low Latency-Aware Resource Choreography Scheme for Decentralized Autonomous Organization (DAO) and Non-DAO Based Application Execution Over Blockchain and MEC Empowered 6 G Network

Decentralized autonomous organization (DAO)-based applications can revolutionize traditional centralized decision-making procedures and services by enabling scalable, decentralized, autonomous, and democratized decision-making processes. Unlike traditional applications, DAO-based decentralized applications use Ethereum blockchain-based smart contract programs to execute policies or make automated decisions. To that end, 6 G technologies can improve the latency and reliability of many existing blockchain-based DAOs. Previous research did not investigate the execution of DAO and non-DAO-based applications, as well as an adaptive resource choreography scheme, while accounting for various 6 G technologies, blockchain, and mobile-edge cloud (MEC). To prevail over the previous shortcomings, this article supplies a street smart multi-platform coordination, application scheduling, and low-latency-aware resource choreography scheme for both DAO and non-DAO-based application execution over blockchain and MEC-enabled 6 G networks by taking heterogenous DAO and non-DAO application count, application requirements, physical worker, virtual worker, and communication resource status into account. The results verified that the proposed kaizen scheme delivers at least 11.26% app work completion delay gain, 7.2% user energy overhead gain, 6.55% user economic charge gain, and 21% service provider profit than the compared schemes.

DAO voting mechanism resistant to whale and collusion problems

With the widespread adoption of blockchain technology, a novel organizational structure known as Decentralized Autonomous Organizations (DAOs) has attracted considerable attention. DAOs facilitate decision-making through member voting, realizing the governance in a decentralized manner. However, DAOs face unique challenges compared to traditional organization. This paper focuses on two key challenges of governance within DAOs: the whale problem and collusion issue. The whale problem is characterized by the concentration of power among specific members, while for the collusion problem, voting results are distorted by fraudulent collaboration. In terms of voting, we consider Quadratic Voting, a voting system expected to deter the concentration of voting power among a subset of participants, analyzing its resistance to the collusion problem. We show with numerical examples that in comparison to Linear Voting, Quadratic Voting lacks resistance to collusion. Then, we propose a voting mechanism that integrates Quadratic Voting with the Vote escrow tokens, demonstrating the mitigation of the whale problem while acquiring resilience to collusion in the decision-making process. The numerical examples confirm the high efficacy of our proposed model.

Web3-DAO: An ontology for decentralized autonomous organizations

Decentralized autonomous organizations (DAOs) are relatively a newly emerging type of online entity related to governance or business models where all their members work together and participate in the decision-making processes affecting the DAO in a decentralized, collective, fair, and democratic manner. In a DAO, members interaction is mediated by software agents running on a blockchain that encode the governance of the specific entity in terms of rules that optimize their business and goals. In this context, most popular DAO software frameworks provide decision-making models aiming to facilitate digital governance and the collaboration among their members intertwining social and economic concerns. However, these models are complex, not interoperable among them and lack a common understanding and shared knowledge concerning DAOs, as well as the computational semantics needed to enable automated validation, simulation or execution. Thus, this paper presents an ontology (Web3-DAO), which can support machine-readable digital governance of DAOs adding semantics to their decision-making models. The proposed ontology captures the domain logic that allows the sharing of updated information and decisions for all the members that interact with a DAO by the interoperability of their own assessment and decision tools. Furthermore, the ontology detects semantic ambiguities, uncertainties and contradictions. The Web3-DAO ontology is available in open access at https://github.com/Grasia/semantic-web3-dao.

Biotechnology Innovation in Do-It-Yourself (DIY) Gene Editing: A Call for a New Regulatory Framework

The expansion of do-it-yourself (DIY) gene editing, facilitated by Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR) technology, has catalyzed a significant shift in scientific research and biotechnology innovation. This movement is propelled by a community-driven approach that challenges the traditional confines of scientific exploration, allowing amateur scientists to perform sophisticated biological experiments. While this democratization fosters inclusivity and accelerates innovation, it simultaneously introduces significant biosecurity risks. The possibility of unregulated gene editing leading to the unintentional creation of harmful organisms or the deliberate engineering of pathogens underscores the need for a new regulatory framework. This paper explores the implications of DIY biology within the context of public health, environmental safety, and biosecurity, highlighting the urgency for adaptive policies that balance scientific freedom with security. It proposes integrating community-driven regulatory practices with formal oversight mechanisms by examining biosecurity implications, ethical considerations, and the potential for misuse. Additionally, the role of decentralized autonomous organizations (DAOs) is explored as a novel approach to transforming governance within the domain of DIY gene editing, particularly in the context of CRISPR research.

Decentralization illusion in Decentralized Finance: Evidence from tokenized voting in MakerDAO polls

Decentralized Autonomous Organization (DAO) is very popular in Decentralized Finance (DeFi) applications as it provides a decentralized governance solution through blockchain. We analyze the governance characteristics in the Maker protocol, its stablecoin DAI and its governance token Maker (MKR). To achieve that, we establish several measurements of centralized governance. Our empirical analysis investigates the effect of centralized governance over a series of factors related to MKR and DAI, such as financial, network and Twitter sentiment indicators. Our results show that governance centralization influences the Maker protocol and that the distribution of voting power matters. The main implication of this study is that centralized governance in MakerDAO very much exists, while DeFi investors face a trade-off between decentralization and performance of a DeFi protocol. This further contributes to the contemporary debate over whether DeFi can be truly decentralized.

Economic policy uncertainty and company stock prices: Empirical evidence from blockchain companies

Blockchain (BC) is a sought-after technology, and the investment in it has garnered significant attention. We utilize a wavelet-based quantile-on-quantile approach to investigate the correlation between economic policy uncertainty (EPU) and BC stock market prices across various periods and market circumstances. The findings suggest an increase in EPU has the potential to depress the stock price of the BC company. It is evident from the outcomes across various time scales that EPU exerts a broad inhibitory influence on the stock price of the BC company in the immediate term, with the extent of this effect potentially diminishing as time passes.

AI-Enabled Governance in Cryptocurrency Communities

This paper explores how the combination of artificial intelligence (AI) can enhance governance in cryptocurrency communities and Decentralized Autonomous Organizations (DAOs). Using insights from blockchain, machine studying, and social computing, we examine moral concerns and dangers While addressing them, we discuss the potential of AI to improve efficiency, transparency and inclusion in phrases of governance shape. Through case studies, we demonstrate sensible packages of AI, consisting of social media sentiment analysis, algorithmic trading, and decentralized forecasting markets. We explore the impact of AI on governance token systems, selection- making processes and community-pushed governance models. Challenges along with algorithmic bias, records privacy, and the need for human oversight are discussed in conjunction with suggested studies suggestions and great practices for implementing responsible AI. This paper explores how the integration of synthetic intelligence (AI) can enhance governance in cryptocurrency communities and decentralized c Decentralized Autonomous Organizations (DAOs). Using insights from blockchain, gadget learning, and social computing, we examine moral worries and dangers While addressing them, we talk the potential of AI to enhance performance, transparency and inclusion in terms of governance structure. Through case research, we display realistic programs of AI, which include social media sentiment evaluation, algorithmic trading, and decentralized forecasting markets. We discover the effect of AI on governance token systems, decision-making methods and network-pushed governance models. Challenges including algorithmic bias, records privateness, and the need for human oversight are mentioned in conjunction with suggested research tips and exceptional practices for the responsible use of AI By clarifying the ability of AI in cryptocurrency governance, we help bridge the space among AI and decentralized selection-making.

Insight Into Voting in DAOs: Conceptual Analysis and a Proposal for Evaluation Framework

Driven by the development of blockchain infrastructures and the promotion of Web 3, more than 4000 Decentralized Autonomous Organizations (DAOs) have been developed as online organizations jointly owned and managed by their members who work for the same interests. Voting mechanisms as the democratic administration of DAOs without the involvement of central authority, are crucial to both the development of the DAO community and the protection of individual interests. This paper is one of the first analyses of the critical role of voting mechanisms in DAOs' operation. In the absence of systematic studies of voting mechanisms in DAOs, we propose five tiers of decentralization in DAO voting which marks the critical difference between DAO voting and conventional voting. We also define four dimensions to comprehensively evaluate the performance of DAO voting mechanisms, which identify the demands and characteristics of DAO voting and put forward clear design guidelines for voting mechanisms in DAOs. Finally, we take seven typical voting mechanisms as examples and analyze their performance in our proposed evaluation schemes.

DAO Dynamics: Treasury and Market Cap Interaction

This study examines the dynamics between treasury and market capitalization in two Decentralized Autonomous Organization (DAO) projects: OlympusDAO and KlimaDAO. This research examines the relationship between market capitalization and treasuries in these projects using vector autoregression (VAR), Granger causality, and Vector Error Correction models (VECM), incorporating an exogenous variable to account for the comovement of decentralized finance assets. Additionally, a Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model is employed to assess the impact of carbon offset tokens on KlimaDAO’s market capitalization returns’ conditional variance. The findings suggest a connection between market capitalization and treasuries in the analyzed projects, underscoring the importance of the treasury and carbon offset tokens in impacting a DAO’s market capitalization and variance. Additionally, the results suggest significant implications for predictive modeling, highlighting the distinct behaviors observed in OlympusDAO and KlimaDAO. Investors and policymakers can leverage these results to refine investment strategies and adjust treasury allocation strategies to align with market trends. Furthermore, this study addresses the importance of responsible investing, advocating for including sustainable investment assets alongside a foundational framework for informed investment decisions and future studies in the field, offering novel insights into decentralized finance dynamics and tokenized assets’ role within the crypto-asset ecosystem.

Parallel Management of IoV Information Enabled by Blockchain and Decentralized Autonomous Organizations

Parallel Management of IoV Information Enabled by Blockchain and Decentralized Autonomous Organizations

FUTURE OF BLOCKCHAIN GOVERNANCE: EXPLORING DECENTRALIZED DEMOCRACY

Blockchain technology presents a paradigm shift in governance, offering decentralized frameworks that challenge traditional centralized systems. This paper delves into the concept of decentralized democracy within blockchain governance and its implications for the future. The paper outlines the foundational principles of blockchain, highlighting its ability to facilitate transparent, trustless transactions through distributed consensus mechanisms. The paper then examines various governance models, from centralized to decentralized approaches such as on-chain governance and decentralized autonomous organizations (DAOs), assessing their strengths and weaknesses. Moreover, the research explores the concept of decentralized democracy, elucidating how blockchain enables transparent, auditable voting systems for direct stakeholder participation in decision-making.