Enacting Accountability in Decentralized Organizations: A Study of the Optimism Collective DAO

Abstract

Accountability is crucial for the success of organized social enterprises. In centralized organizations, hierarchical structures clearly define accountability. However, in decentralized organizations, which rely on technology for collaboration, accountability can be ambiguous because, in many cases, these organizations lack centralized planning, have no formally-identified leadership, and allow members to leave without obvious consequences. This study examines how decentralized organizations, specifically decentralized autonomous organizations (DAOs), enact accountability. We conducted a theory-building study using digital data from a DAO to explore the enacted accountability mechanisms. The findings revealed two main approaches. First, iterative public governance forums provide “soft” accountability, fostering answerability over time. Second, these forums often lead to “hard” accountability, where binary voting via digital tokens allows for immediate sanctioning when deemed appropriate by members. These insights advance knowledge on accountability in decentralized organizations, which constitute a fast-growing sector of technology-dependent work environments.