The ins and outs of decentralized autonomous organizations (DAOs)

Abstract

Despite the increase in the number of blockchain-based Decentralized Autonomous Organizations (DAOs), there is no consensus on what constitutes a DAO. This paper provides an in-depth study of DAOs by analyzing their definitions, characteristics, and emerging developments. Existing definitions in the literature hardly recognize common functionalities and intermingle coded DAOs, DAO deployment platforms, and blockchain DAOs. We developed a comprehensive DAO definition by reviewing the literature and empirically analyzing 1,859 DAOs. The findings show that many DAOs were inactive and that a threshold of 20 tokenholders is a tipping point for DAOs to survive over time and maintain sustained levels of activity. Finally, based on an empirical analysis of 9,845 perceived DAOs, we identified the emerging development of off-chain voting. This emerging development challenges the autonomous nature of DAOs. We recommend further research to investigate the effect of governance structures on their long-term sustainability and viability for both on-chain and off-chain DAOs.