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Voting governance and value creation in decentralized autonomous organizations (DAOs)

Author

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  • Bellavitis, Cristiano
  • Momtaz, Paul P.

Abstract

Decentralized autonomous organizations (DAOs) crowdfunds to invest in various projects. The decentralization feature of DAOs submits that decision-making is a collective democratic action of all DAO members. The autonomy feature of DAOs suggests that decision-making is an algorithmic process governed by self-executing smart contracts. However, in reality, DAOs are neither perfectly decentralized nor completely autonomous. Our empirical analysis shows that deviations from the ideals of decentralization and autonomy are costly. Non-algorithmic off-chain voting governance of decision-making leads to a substantial discount in DAO value. Non-decentralized aspects such as large voting coalitions also affect DAO value. Interaction effects are also shown. The study implies that platform governance design choices are crucial for DAO success.

Suggested Citation

  • Bellavitis, Cristiano & Momtaz, Paul P., 2025. "Voting governance and value creation in decentralized autonomous organizations (DAOs)," Journal of Business Venturing Insights, Elsevier, vol. 23(C).
    • Handle: RePEc:eee:jobuve:v:23:y:2025:i:c:s2352673425000241
    DOI: 10.1016/j.jbvi.2025.e00537
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    More about this item

    Keywords

    Decentralized autonomous organization (DAO); Blockchain technology; On- versus off-chain governance; Crowdfunding; Entrepreneurial finance;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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