Governance in Decentralized Finance: Aligning DAOs with IT Management and Regulatory Compliance in Indonesia

Abstract

This paper explores the alignment between DAO governance mechanisms, IT governance frameworks, and Indonesia’s regulatory environment. Using a qualitative document analysis of academic literature, DAO governance documentation, IT governance standards (COBIT, ITIL, ISO/IEC 38500), and Indonesian regulatory texts issued by Bappebti, Bank Indonesia, and the Financial Services Authority (OJK), the study identifies critical areas of convergence and divergence. Findings indicate that DAOs demonstrate strong transparency due to on-chain records, but remain weak in accountability, stakeholder alignment, risk management, and compliance. These weaknesses generate friction with Indonesia’s fragmented regulatory landscape, where crypto assets are classified as commodities, prohibited as payment instruments, and inconsistently taxed. Stakeholder management emerges as a pressing concern, as token-weighted voting privileges large holders while Indonesian retail investors face governance literacy gaps. To address these challenges, the paper proposes a hybrid governance framework that integrates IT governance principles with DAO structures, supplemented by compliance mechanisms tailored to Indonesian regulations. Recommendations include the introduction of accountability representatives, adoption of quadratic voting, adaptation of COBIT-based risk management, and establishment of regulatory sandboxes. The study contributes to the discourse on DeFi governance by offering a conceptual model for reconciling decentralized innovation with national regulatory frameworks in emerging markets such as Indonesia.