DAOs: Governance in the Blockchain Era

Abstract

Blockchain technology promises to revolutionize not only the way we transact among peers but also the way we organize to create socio-economic value. Decentralized autonomous organizations (DAOs) are governed and owned by the community whose members follow a set of blockchain-embedded governance rules that define and control participation. In this chapter, we will clarify what governance decentralization and automation mean, examining DAOs’ distinguishing characteristics. We will also discuss the problems that DAOs solve (e.g., lack of extrinsic incentives, censorship, mismanagement and lack of transparency and accountability), as well as the problems they face (e.g., lack of participation, rigidity, voting misbehaviours and legal status).