Paper 2025/388

Fair Exchange for Decentralized Autonomous Organizations via Threshold Adaptor Signatures

Abstract

A Decentralized Autonomous Organization (DAO) enables multiple parties to collectively manage digital assets in a blockchain setting. We focus on achieving fair exchange between DAOs using a cryptographic mechanism that operates with minimal blockchain assumptions and, crucially, does not rely on smart contracts. Specifically, we consider a setting where a DAO consisting of $n_\mathsf{S}$ sellers holding shares of a witness $w$ interacts with a DAO comprising $n_\mathsf{B}$ buyers holding shares of a signing key $sk$; the goal is for the sellers to exchange $w$ for a signature under $sk$ transferring a predetermined amount of funds. Fairness is required to hold both between DAOs (i.e., ensuring that each DAO receives its asset if and only if the other does) as well as within each DAO (i.e., ensuring that all members of a DAO receive their asset if and only if every other member does). We formalize these fairness properties and present an efficient protocol for DAO-based fair exchange under standard cryptographic assumptions. Our protocol leverages certified witness encryption and threshold adaptor signatures, two primitives of independent interest that we introduce and show how to construct efficiently.