Review of Financial Studies Vol. 36 No. 4 2023

Corporate Capture of Blockchain Governance

Daniel Ferreira¹; Jin Li²; Radoslawa Nikolowa³

¹ London School of Economics , CEPR, and ECGI, UK · ² University of Hong Kong, Faculty of Business and Economics , Hong Kong and CEP, UK · ³ Queen Mary University of London , UK

Abstract

We develop a theory of blockchain governance. In our model, the proof-of-work system, the most common set of rules for validating transactions in blockchains, creates an industrial ecosystem with specialized suppliers of goods and services. We analyze the interactions between blockchain governance and the market structure of the industries in the blockchain ecosystem. We show that the proof-of-work system may lead to a situation in which some large firms in the blockchain industrial ecosystem—blockchain conglomerates—capture the governance of the blockchain.

DOI

10.1093/rfs/hhac051

Volume

36

Issue

4

Pages

1364-1407

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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