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Distributed governance and value creation in decentralized autonomous organizations: Evidence from a regression discontinuity design

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  • Lo Monaco, Valerio
  • Momtaz, Paul
  • Vismara, Silvio

Abstract

Distributed governance mechanisms increase tokenholders value in decentralized autonomous organizations (DAOs) when decision-making is contested. Using a comprehensive dataset of proposals voted on within blockchain-based DAOs from 2020 to 2024, we exploit a regression discontinuity design on proposals that pass or fail by a close margin around the majority threshold. Local average treatment effects indicate that proposal passage increases DAO token returns by 4.7 % at the margin. Further, a one standard deviation increase in vote participation amplifies this effect by 2.2 %. Proxies for democratization and decentralization also increase the value-creating effect of contested decision-making in DAOs. Our findings contribute to understanding how distributed governance structures create value in digital organizations.

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  • Lo Monaco, Valerio & Momtaz, Paul & Vismara, Silvio, 2025. "Distributed governance and value creation in decentralized autonomous organizations: Evidence from a regression discontinuity design," Economics Letters, Elsevier, vol. 248(C).
    • Handle: RePEc:eee:ecolet:v:248:y:2025:i:c:s0165176525000709
    DOI: 10.1016/j.econlet.2025.112233
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    References listed on IDEAS

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    6. Cumming, Douglas & Drobetz, Wolfgang & Momtaz, Paul P. & Schermann, Niclas, 2025. "Financing decentralized digital platform growth: The role of crypto funds in blockchain-based startups," Journal of Business Venturing, Elsevier, vol. 40(1).
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    Cited by:

    1. Johannes Fuchs & Paul P. Momtaz, 2025. "A New Era of Entrepreneurial Finance? Venture Tokenization and Public Markets for Startups," CESifo Working Paper Series 11760, CESifo.

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    More about this item

    Keywords

    Blockchain; Tokens; Decentralized autonomous organizations; Corporate governance; Shareholder activism;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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