Short Paper: Requirements and Benefits of a DAO Tokenomics Framework

Abstract

Decentralized autonomous organizations (DAOs) have gained popularity over the last few years. Many projects use a DAO for community-based decisions and use a token to enable governance processes and foster participation. The setup of these tokens varies from DAO to DAO. While there are some general tokenomics frameworks, there is no DAO-specific framework including designs of multiple tokens. In this short paper, we aim at exploring the development of such DAO tokenomics framework. To unravel requirements and benefits of such a framework, we conduct interviews with six experts from the Swiss blockchain ecosystem. Switzerland is at the forefront of blockchain development and therefore well suited to serve as an exploration ground. Our results show that a DAO tokenomics framework needs to provide clear guidance while still being flexible to diverse project needs. It may bring along economic gains coupled with a risk reduction and an innovation boost for Switzerland. These benefits could be generalized to other jurisdictions making the development of a DAO tokenomics framework worthwhile.