ABSTRACT
Smart contracts are digital agreements partially or fully executed through blockchain-based code. This chapter examines smart contracts as tools for private governance. Smart contracts spur innovation in private governance because they are digital native, machine-agnostic, global, censorship-resistant and composable. We examine these characteristics of smart contracts before outlining their innovative applications in decentralized organizations, market infrastructure and dispute resolution. Smart contracts have the potential to lower the costs of private governance, expand the design space for private institutional experimentation, and enable greater institutional choice and competition. Ultimately this process expands the order of market-based coordination.
Allen, Darcy WE and Lane, Aaron M, Smart Contracts as Private Governance Tools (October 11, 2023).
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