2023/01/14 by Sarad Venugopalan, Venugopalan, Sarad, Heiko Aydt +1
Business, Management and Accounting · #Business Strategy and Innovation #Cryptography and Security (cs.CR) #Digital Platforms and Economics #FOS: Computer and information sciences #FinTech, Crowdfunding, Digital Finance
paper · pdf · doi:10.48550/arxiv.2301.05945
openalex publication_date 2023/01/14 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Decentralised Autonomous Organisations (DAOs) have recently piqued the interest of participants from diverse backgrounds, including business owners, engineers, individual and institutional investors. In part, the promised autonomy (less rigid structure and more voice) in decision making along with ease of market access, has resulted in its participants pouring in their time and economic resources. In a DAO, governance is typically enacted via posting proposals and collectively voting on it. The winning proposals are then implemented. However, governance alone may be insufficient, when its participants economic incentives are misaligned. Governance and tokenomics need to work in tandem to ensure business stability. We present a case study on an example building data asset from the construction industry and present its tokenomics. We show its working, both as a caretaker and strategic DAO, to illustrate its effects on governance and DAO stability. The case study serves as an example for participants to decide whether their DAO tokenomics are aligned with participation incentives. Finally, we propose the DAO tension quadrilateral to study DAO stability and build a tool to measure agreement among its participants.