kaal:claim:3652481-026

Stable and presumptively optimal static or constitutional rules for DAO governance typically enable gaming and arbitrage opportunities, because rational opportunistic parties will circumvent complex static rules to increase their share of power and profit.

Source quote, verbatim

Stable and presumptively optimal static and/or constitutional rules for DAO governance therefore typically enable gaming and arbitrage opportunities.

From

Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020), IV.1.a Dynamic Elements, p. 35
https://ssrn.com/abstract=3652481 · source PDF

Cite as

Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481

Holds when

the system is open and democratic
the rule set is static and complex

Classification

failuresupport: arguedfailure: static rule gamingfamily: rule-obsolescence-and-ossificationregulatory-failuregovernance-design

Related claims

extended_by kaal:claim:3799320-025 In any open and democratic system, naturally opportunistic rational parties will attempt to circumvent and gam...
extends kaal:claim:3441904-035 Static complex sets of DAO rules inevitably produce corruptive opportunistic gaming and arbitrage behavior, so...

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Positions extending this scholarly claim

Qualification: Decentralized Autonomous Organizations - Evolution, Challenges, and Opportunities