Governance impacts of blockchain-based decentralized autonomous organizations

Governance impacts of blockchain-based decentralized autonomous organizations: An empirical analysis

Rikken, O.K. (TU Delft Information and Communication Technology)
Janssen, M.F.W.H.A. (TU Delft Engineering, Systems and Services)
Roosenboom-Kwee, Z. (TU Delft Economics of Technology and Innovation)

Engineering, Systems and Services

2023

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.

http://resolver.tudelft.nl/uuid:bd11cc1c-884b-40bb-9f52-2a0e84196c8b

https://doi.org/10.1080/25741292.2023.2270220

2574-1292

Policy Design and Practice, 6 (4), 465-487

Institutional Repository

journal article

© 2023 O.K. Rikken, M.F.W.H.A. Janssen, Z. Roosenboom-Kwee