DECENTRALIZED SOCIAL JUSTICE: ASSESSING THE ROLE OF DECENTRALIZED AUTONOMOUS ORGANIZATIONS (DAOS) IN INFAQ AND SADAQAH MANAGEMENT

Abstract

The rapid expansion of blockchain-based governance has introduced new models for managing philanthropic resources, including the use of Decentralized Autonomous Organizations (DAOs) to distribute infaq and sadaqah. The decentralization of decision-making and the automation of financial flows offer potential solutions to long-standing challenges such as transparency deficits, centralization of authority, and inefficiencies in conventional charity systems. The research is motivated by the growing need to evaluate whether DAOs can enhance accountability, inclusivity, and equitable resource distribution within Islamic social finance. The study aims to assess the effectiveness of DAO-driven mechanisms in managing infaq and sadaqah, particularly their capacity to ensure fair participation, minimize human bias, and strengthen social justice outcomes. The objectives include analyzing governance structures, technological capabilities, and ethical implications of DAO integration. A mixed-methods design was adopted, combining blockchain system analysis, interviews with Islamic finance experts, and simulation of DAO-based distribution models. The study also employed comparative evaluation between traditional centralized charity workflows and smart contract–enabled automation. The results indicate that DAO-based models significantly improve transparency, reduce administrative delays, and enhance participatory decision-making among community members. Smart contracts ensure tamper-proof recordkeeping, while tokenized voting systems strengthen collective oversight and reduce elite capture. The research concludes that DAOs offer a promising pathway for decentralized social justice by aligning technological decentralization with Islamic ethical principles of fairness, trust, and communal responsibility. Strengthening digital literacy, enhancing regulatory clarity, and developing Shariah-compliant smart contract standards are essential for sustainable implementation.