Mitigating Antitrust Risk in Decentralized Autonomous Orgs

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The proliferation of blockchain applications has enabled the creation of decentralized autonomous organizations, or DAOs. DAOs offer the promise of delivering procompetitive benefits, such as increased efficiencies and lower costs, to members of these organizations, as well as to consumers. In the rush to market, however, it is important not to overlook antitrust risks. Failing to ensure your DAO design does not restrain competition or enable collusive activities risks erasing any first-mover advantage and having the organization shut down as a whole. Founders of DAOs and their in-house counsel need to take the proper precautions by auditing the DAO’s design, implementing an antitrust policy and ensuring there is a way to address violations of that policy going forward because the decentralized nature of DAOs may otherwise make remediation of antitrust violations more challenging.