In a market as elitist, opaque, and illogical as the one for fine art, could DAOs really take hold?Sotheby’s chairman Brooke Lampley on the phone for the winning bid of the Constitution at Sotheby’s New York. Photo courtesy of Sotheby’s New York.
Crypto supporters claim that DAOs give regular people the chance to have unprecedented influence. Forget CEOs and central leaders. Instead, decisions are made collectively on the blockchain. But in a market as elitist, opaque, and illogical as the one for fine art, could DAOs really take hold? And will they become a force for good or ill?
To some observers, joining a DAO is no different from buying stock—except there is a lot less regulation. “As far as I can tell, the idea behind a DAO is to create a joint stock corporation designed around basic majority shareholder voting without doing the paperwork necessary to do a joint stock corporation,” said Nicholas Weaver, a researcher at the University of California, Berkeley.
These structures raise concerns among regulators, even those who embrace cryptocurrencies. One pro-crypto SEC commissioner has warned that fractionalized NFTs resemble illegal securities offerings. Exactly how such assets will be treated and traded in the future remains to be seen.Yes.
Essentially, DAOs strive to offer the best of the fungible and nonfungible worlds—a governance token that is easier to trade with the exclusivity of a one-of-a-kind digital asset.When it comes to acquiring fine art, DAOs quickly run into challenges. The main one is fundamental: Whothe DAO, really? While DAOs claim greater transparency because all voting and transactions take place on the blockchain, their membership is often opaque.