DAO Disruption Across Industries

Tech enthusiasts and industry promoters allege that decentralized autonomous organizations (DAOs) confer a competitive advantage of traditional firms through increased efficiency, cost reduction, and scalability. To evaluate such claims systematically, we undertake a comprehensive GICS industry-level analysis. We conjecture that a one-size-fits-all structure may not be suitable for all businesses or industry segments and engage in a SWOT analysis to unravel key features that make a DAO pertinent for a typical firm in the relevant industry to embrace. Our first conclusion is that the suitability of a DAO for a particular industry is contingent on its specific needs and goals, the prevailing regulatory environment, legal developments, and a host of industry- and objective-specific antecedents. We also find that tech- and consumer-oriented industries stand to benefit the most by adopting a DAO format. We carry out a supplementary conceptual exercise by customizing principles from Christensen's Disruptive Innovation Theory and Coase's transaction cost theory to assess the likelihood of DAO disruption per industry. Findings from simulated scenarios of incremental DAO adoption indicate that information technology, finance, and energy sectors are poised the most for DAO disruption, while basic materials, heavy industries, and utilities are least likely. In a nutshell, DAO suitability is low for concentrated industries and those exposed to hawkish regulations. The results’ caveats include legal personality and legislative uncertainties