An Exploration of Governing via IT in Decentralized Autonomous Organizations

Abstract

A decentralized autonomous organization (DAO) is a distinct form of platform meta-organization that heavily relies on smart contracts running on blockchains to govern a distributed network of autonomous actors, thereby continuing the shift toward governance via IT. Motivated by the fact that this shift toward governance via IT in DAOs challenges established assumptions in the literature on IT governance, we explore how DAOs are governed via IT. For this purpose, we applied techniques of grounded theory to build inductive theory by analyzing five cases of DAOs (Aragon, Flare Networks, KyberDAO, MakerDAO, and MolochDAO) based on white papers, blog entries, and newspaper articles. Our findings implicate that DAOs governed via IT synthesize autonomy and alignment through the mechanism of “establishing algorithmic organization.” At the same time, DAOs rely on a more pluralistic and decentralized form of algorithmic management through the mechanism of “taming algorithmic power.”