Decentralized autonomous organizations: A Community-Driven digital governance system on the blockchain

In recent years, we have seen a surge in so-called Decentralized Autonomous Organizations (DAOs). These are online communities that have come together to pursue a specific goal. Some are research- and media-oriented, discussing Sustainable Development Goals (SDGs) like waste management or financial literacy, voting on solutions, identifying research priorities, and publishing articles to inform the public. Other DAOs take a more active role by planning and organising initiatives that, for instance, aim to make cities greener, more digital, and more democratic. Some well-known examples are GreenDAO, OceanDAO, and SoCity DAO—communities that promote urban development by incentivising pro-social behaviour. A defining characteristic of DAOs is their use of blockchain-based governance systems, meaning that these communities lack formal divisions between governance, executive, and supervisory bodies. Instead, members participate in decision-making by voting on proposals online. Anyone can join a DAO, and all governance processes (such as voting polls, vote counting, and voting rules) are managed through smart contracts (computer programs stored and executed on the blockchain) to ensure fairness and transparency. When a proposal gains majority support, it is executed and implemented; if it does not, it is rejected. As of 2025, there are over 80,000 DAOs, with a market valuation of $60 billion. In this project, we will examine various governance models of DAOs, exploring their risks, benefits, and overall effectiveness in maximising community welfare. Many blockchain-based governance models resemble direct democracies. For instance, in Switzerland, citizens vote directly on policies covering social and environmental issues, infrastructure, finance, and education. Similarly, blockchain-based governance allows people to vote directly on community projects, funding decisions, or governance processes. Unlike traditional voting, which relies on paper ballots and manual counting, blockchain-based governance is digital, automated, inclusive, and cost-effective. These advantages make it easier to conduct frequent elections and polls, which is driving the increasing adoption of blockchain technology in governance. Blockchain-based governance has attracted interest from cryptocurrency stakeholders and global regulators alike, who are seeking to understand when and why decentralised governance systems succeed or fail, how they are influenced, and how accountability is managed in cases of misuse or failure. Since its inception in 2009, blockchain technology has grown into one of the largest financial settlement systems, used for trading, lending, and borrowing cryptocurrencies. With the rise of DAOs, cryptocurrencies are now used not only for trading but also as a voting mechanism for DAO proposals. In our report, we will bring together knowledge from areas such as finance, economics, political science, law, and computer science to analyse the pros and cons of this novel governance mechanism. Blockchain governance also offers insights into voting behaviour, as votes are recorded on the blockchain and are publicly accessible. We will synthesise insights into voter behaviour, influencing factors, and causal relationships that have previously been difficult to explore. We are confident that our knowledge synthesis report will provide valuable insights into this new and fast-growing form of governance, which has been under-explored in the literature.