Brief Overview of the Italian Landscape
Despite the fascinating implications and prospects that a DAO can instill in the minds of participants or those who decide to establish one, it remains clear (at least for the moment) that such intentions clash with the Italian legal landscape.
Envisioning a corporate context that lacks official bodies and “self-governs” through smart contracts or autonomous decision-making algorithms, even with meticulous and controlled programming in advance, encounters practical difficulties within the framework of rules established by our legal system.
In practice, therefore, the first obstacle to be addressed is precisely the issue of qualifying the relationships between individuals participating in a DAO and among those who participate in it. The identification of specific roles is desirable, much like in “conventional” companies, especially concerning the allocation of potential responsibilities in specified cases.
The example that immediately comes to mind is “TheDAO,” where its management was embedded in the rules of smart contracts but still obeyed the decisions of the token holders.
The limited group of token holders could express their own wishes by interacting with the smart contracts, determining the direction and objectives of the DAO, even though they did not have access to transaction execution.
In general, we can affirm that the distinctive feature of DAOs and the underlying blockchain technology is decentralization, namely the absence of a central entity with directive and managerial authority over all related activities.
And it is precisely this feature that appears as an obstacle to the legal classification of DAOs in our system, which instead prescribes the existence of administrators with specific rights, duties, and powers.
Other purely legal and corporate obstacles relate to the difficulty of transferring corporate shares (both in joint-stock companies and limited liability companies), for which regulatory changes beyond the scope of this article would be necessary. Regarding some potential solutions identified or yet to be identified, we defer to future discussions.
What is important to emphasize today is the need to approach the emergence of these new forms of collectivity with curiosity and an open mind, without prejudice. Despite their very recent birth, these examples come with a rich history. They vary in their characteristics but share complexity in technical management and organizational decision-making among members. Part of this complexity is alleviated by the continuous improvement of algorithms, security measures, management policies, and increasingly specific and controlled smart contracts, with speeds and timings previously unimaginable just a few years ago.
The goal of DAOs is to achieve equal participation in “corporate” life (often a drawback due to the vast number of active community members) and swift decision-making to accomplish set objectives, better and faster.
Will they succeed in making bureaucracy a distant memory? All the prerequisites are there. And so are the expectations.
DAOs are autonomous organizations that rely on blockchain technology to operate independently of a single central authority. This system has become increasingly popular in recent years, and the outlook for the future is very positive.
According to industry experts, DAOs will continue to evolve in the coming months. We expect further technological developments that will make these organizations even more efficient and scalable. Additionally, we anticipate that more companies will embrace this new paradigm because it offers greater transparency and stakeholder participation, and above all, it is “always verifiable,” another crucial feature that should not be overlooked.
Some possible innovations we can expect include the creation of multi-chain DAOs, the ability to use multiple tokens within the same DAO, and the introduction of more sophisticated voting mechanisms.