TY - JOUR
T1 - Governance impacts of blockchain-based decentralized autonomous organizations
T2 - An empirical analysis
AU - Rikken, O.K.
AU - Janssen, M.F.W.H.A.
AU - Roosenboom-Kwee, Z.
PY - 2023
Y1 - 2023
N2 - The rapid rise in blockchain-based Decentralized Autonomous Organizations (DAOs) offers policy-makers and decision-makers new opportunities to automatically execute decisions and processes that help enhance transparency, accountability, participation and trust. Yet, many DAOs have a limited lifespan. There is little empirical evidence of the effect of governance elements on the viability of DAOs. Using 220 on-chain governed DAOs, this paper analyses how governance elements (accountability, decision/voting, and incentives) influence the viability of DAOs in the long-term. The findings show that DAOs without weighted decision-making and without incentive structures are more viable than those with weighted decision power and incentive mechanisms. This suggests that financial and share-like DAO governance elements do not or may even negatively contribute to the long-term viability of DAOs. Also, voting power distribution is found to have a statistically significant influence on DAOs’ viability. We further propose a preliminary theory that relates governance elements to the long-term viability of DAOs. These insights will help policy-makers in designing more viable DAOs. Future research should investigate how DAO objectives, the chosen deployment infrastructure and the type of users can impact the long-term viability of DAOs.
AB - The rapid rise in blockchain-based Decentralized Autonomous Organizations (DAOs) offers policy-makers and decision-makers new opportunities to automatically execute decisions and processes that help enhance transparency, accountability, participation and trust. Yet, many DAOs have a limited lifespan. There is little empirical evidence of the effect of governance elements on the viability of DAOs. Using 220 on-chain governed DAOs, this paper analyses how governance elements (accountability, decision/voting, and incentives) influence the viability of DAOs in the long-term. The findings show that DAOs without weighted decision-making and without incentive structures are more viable than those with weighted decision power and incentive mechanisms. This suggests that financial and share-like DAO governance elements do not or may even negatively contribute to the long-term viability of DAOs. Also, voting power distribution is found to have a statistically significant influence on DAOs’ viability. We further propose a preliminary theory that relates governance elements to the long-term viability of DAOs. These insights will help policy-makers in designing more viable DAOs. Future research should investigate how DAO objectives, the chosen deployment infrastructure and the type of users can impact the long-term viability of DAOs.
UR - http://www.scopus.com/inward/record.url?scp=85174313803&partnerID=8YFLogxK
U2 - 10.1080/25741292.2023.2270220
DO - 10.1080/25741292.2023.2270220
M3 - Article
SN - 2574-1292
VL - 6
SP - 465
EP - 487
JO - Policy Design and Practice
JF - Policy Design and Practice
IS - 4
ER -