Colin Gilson and Sarah Bouraga
This paper aims to explore the problem of power imbalance within decentralized autonomous organizations (DAOs) and propose potential solutions that could contribute to enhancing…
Abstract
Purpose
This paper aims to explore the problem of power imbalance within decentralized autonomous organizations (DAOs) and propose potential solutions that could contribute to enhancing the democratic nature of DAOs.
Design/methodology/approach
In this paper, the authors apply a qualitative methodology. Using a thematic coding analysis, the authors process data collected from interviews with 11 experts.
Findings
Multiple factors contribute to the perceived lack of democracy within DAOs, such as token concentration and effective stakeholder communication. Next, quadratic voting has the potential to enhance democracy within DAOs, but this mechanism must be implemented mindfully. Finally, the results were nuanced when it comes to the effectiveness of liquid democracy in DAOs to enhance voter participation and representation.
Originality/value
To the best of the authors’ knowledge, this paper is one of the first research contributions to propose recommendations to address the power imbalance within DAOs and to contribute to the advancement of decentralized decision-making structures.
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Kumar Saurabh, Parijat Upadhyay and Neelam Rani
Decentralised autonomous organisations (DAOs) are internet-native self-governing enterprises where individual groups, communities, agencies, consumers and providers work together…
Abstract
Purpose
Decentralised autonomous organisations (DAOs) are internet-native self-governing enterprises where individual groups, communities, agencies, consumers and providers work together using blockchain-led smart contracts (SCs). This study aims to examine the role of DAO marketplaces in technology-led autonomous organisation design for enterprise technology sourcing industries, with algorithmic trust and governance.
Design/methodology/approach
The authors examined the importance of an enterprise marketplace governance platform for technology sourcing using DAO as a decentralised/democratised business model. A total of 98 DAO products/services are evaluated across 11 industries that envisage DAO as a strategic choice for the governance of decentralised marketplace platforms.
Findings
The research findings validate how a DAO-led enterprise marketplace governance platform can create a cohesive collaboration between consumers (enterprises) and providers (solution vendors) in a disintermediated way. The proposed novel layered solution for an autonomous governance-led enterprise marketplace promises algorithmic trust-led, self-governed tactical alternatives to a strategic plan.
Research limitations/implications
The research targets multiple industry outlooks to understand decentralised autonomous marketplace governance and develop the theoretical foundation for research and extensive corporate suitability.
Practical implications
The research underpinnings boost the entrepreneurs’ ability to realise the practical potential of DAO between multiple parties using SCs and tokenise the entire product and service offerings over immutable ledger technologies.
Originality/value
To the best of the authors’ knowledge, this research is unique and the first of its kind to study the multi-industry role of algorithmic trust and governance in enterprise technology sourcing marketplaces driven by 98 decentralised and consensus-based DAO products across 11 industries.
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Kumar Saurabh, Neelam Rani and Parijat Upadhyay
Today, business model innovations leverage digital technologies to gain a competitive advantage and transform business processes. Blockchain is still gaining attention in specific…
Abstract
Purpose
Today, business model innovations leverage digital technologies to gain a competitive advantage and transform business processes. Blockchain is still gaining attention in specific fields and bringing value to business models. There is a dearth of research on how blockchain decentralized autonomous organizations impact organization business model innovations. This study attempts to contribute the body of knowledge based on a review of decentralized autonomous organizations and the business model innovation literature using the integrative and generative approach.
Design/methodology/approach
The paper offers an analysis of decentralized autonomous organizations based on digital business models built on the well-established work by Osterwalder and Pigneur (2010). The practical multilayered decentralized autonomous organizations architectural implementation model design is achieved using practical archetypes depicted in the proposed decentralized autonomous organizations business model. The paper evaluates a marketplace comprising 13 decentralized autonomous organizations led platforms with core functionalities.
Findings
The paper delivers decentralized autonomous organizations led digital business model canvas elements to explain decentralized autonomous organization business model innovations. It presents the underlying multilayered decentralized autonomous organizations architectural implementation model required to conceptualize a practical business model with an enterprise-ready target operating model.
Research limitations/implications
The paper contributes directly to the practical decentralized autonomous organizations business model canvas, exemplifying the nine elements of decentralized autonomous organizations’ characteristics for any organizational transformation. The tools and accelerators (business model, layered architecture, target operating model and product mapping) developed in the paper address the managerial challenges of redesigning the decentralized business models.
Originality/value
The proposed decentralized autonomous organizations smart contract powered business model provide a digital platform to adhere to rules, follow policies, preserve principles and develop consensus without human interventions. The paper shapes the first of its kind decentralized autonomous organizations marketplace evaluation while mapping it to decentralized autonomous organizations layered architecture product requirement considering business model dimension to adopt actionable target operating model.
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Ilan Alon, Haakon Stole Klemetsen, Aušrinė Šilenskytė and Ilan Gildin
This study aims to explore the innovative governance structures enabled by blockchain-based decentralized autonomous organizations (DAOs) in the context of international business…
Abstract
Purpose
This study aims to explore the innovative governance structures enabled by blockchain-based decentralized autonomous organizations (DAOs) in the context of international business (IB). As nonhierarchical entities managed through collective voting and peer-to-peer interactions, DAOs challenge traditional assumptions of multinational corporation (MNC) governance.
Design/methodology/approach
The authors perform a literature review, which combines qualitative content analysis of both academic papers on DAO and whitepapers with quantitative analysis of bibliometrics using VosViewer.
Findings
The findings highlight DAOs’ ability to generate new research questions and offer a foundation for future studies on decentralized governance in IB. Through a bibliometric analysis of 73 papers from Web of Science and qualitative content analysis, the authors identify four primary research streams in the DAO literature. A deep dive into financial DAOs, or DeFi DAOs, reveals insights into their governance mechanisms and implications for the studies in the field of IB.
Research limitations/implications
Research on DAOs is in its early stages, and the practice in IB is nascent. As the regulatory, economic and technological landscape for DAOs changes, more research will be needed on the governance mechanisms and their sustainability.
Originality/value
This paper advances the field by providing a multilevel analysis of DAOs’ potential impact on IB, considering macro (country), meso (MNC/DPE) and micro (multicultural team and individual) levels.
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Thiago Dias Monteiro, Otavio Próspero Sanchez and Gustavo Hermínio Salati Marcondes de Moraes
The current scenario shows increased adoption of off-chain voting applications in decentralized autonomous organizations (DAOs) to avoid complexity and costs for user engagement…
Abstract
Purpose
The current scenario shows increased adoption of off-chain voting applications in decentralized autonomous organizations (DAOs) to avoid complexity and costs for user engagement in their governance. This paper aims to comprehend the trends and patterns within the DAO community with off-chain voting systems and blockchain usage.
Design/methodology/approach
This exploratory study uses a two-pronged quantitative approach, combining descriptive statistical analysis and fuzzy-set qualitative comparative analysis. Input data from different DAO proposals and votes were analyzed.
Findings
Results indicate that the 179 DAOs analyzed account for 26,538 proposals and 1,268,474 followers of the entire Snapshot base in January 2023, showing high concentration in engagement. The preferred social media communication channels are Twitter and GitHub, showing a decrease of Ethereum as a main chain, with Polygon and Binance Smart Chain already accounting for 22%. Basic voting can lead to greater user involvement in the voting process.
Research limitations/implications
This study complements the traditional governance theory perspective and advances in the emerging literature on DAOs and blockchain with an empirical analysis.
Practical implications
As blockchain technology gains increasing adoption, comprehending trends and patterns within the DAO community becomes pivotal in identifying opportunities and challenges for innovation and improvement.
Social implications
Findings can facilitate the development of improved governance models and decision-making processes for DAOs, leading to a more robust and sustainable ecosystem.
Originality/value
This study presents a broader IT-based governance foresight via blockchain while providing an understanding of the voting process, technology features and governance mechanisms for social community engagement and decision-making in DAOs.
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Jeremy I. Senderowicz, K. Susan Grafton, Timothy Spangler, Kristopher D. Brown and Andrew J. Schaffer
To explain the recent determination by the US Securities and Exchange Commission (SEC) with respect to so-called “token sales” or “initial coin offerings” (ICOs) that some tokens…
Abstract
Purpose
To explain the recent determination by the US Securities and Exchange Commission (SEC) with respect to so-called “token sales” or “initial coin offerings” (ICOs) that some tokens may be securities under federal securities laws and to address other recent actions by the SEC with respect to ICOs.
Design/methodology/approach
Reviews the SEC’s determination that some tokens issued in an ICO may be securities under federal securities laws as outlined by the SEC’s Division of Enforcement in a “Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO.” Provides overview of SEC Investor Alert, Investor Bulletin, and recent comments and actions of the Staff regarding investment in ICOs and provides guidance to those interested in participating in an ICO as an investor or issuer.
Findings
These actions by the SEC make it clear that the SEC is closely monitoring the market for ICOs, and that it wants potential investors and issuers to be aware that it is watching and may take action if it believes the securities laws have been violated.
Originality/value
Practical overview of recent developments and guidance from experienced securities and financial services lawyers.
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Walter Cameron Malau, Paschal Ohalehi, Eldin Soha Badr and Kemi Yekini
Financial transactions fraud (FTF) and financial statements fraud (FSF) grew exponentially during the past decades coupled with complex and sophisticated technological…
Abstract
Purpose
Financial transactions fraud (FTF) and financial statements fraud (FSF) grew exponentially during the past decades coupled with complex and sophisticated technological developments. This study aims to investigate the practitioners’ interpretation of fraud with recurring audit issues in the disclaimer audit opinions (DAOs) reports within the Solomon Islands public sector (SIPS).
Design/methodology/approach
The empirical study involves qualitative data analysis. The analysis alongside theoretical developments is informed by the “fraud triangle” theory.
Findings
The research results revealed the practitioners’ acknowledgement of FSF, FTF and fraud in the SIPS, as generally prevalent and aligned to some components of the fraud triangle theory. This study is sceptic about the good intentions of the International Public-Sector Accounting Standards –Cash-basis framework and favours the Provincial Government Act 1997 and the Public Finance Management Act 2013 requirements. It further suggests that fraud is positively linked to repeated audited report issues and the executive management when DAOs issues appear repeatedly in annual audit reports.
Originality/value
This study contributes to the literature on fraud and attempts to link the interpretation of fraud with recurring audit issues in the DAOs reports in the SIPS. It views fraud awareness and knowledge from the perspective of the audit practitioner. There is an increasing need to understand how fraud knowledge impacts decision making and the actions of auditors and others, an area that is underdeveloped.
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Decentralized autonomous organizations (DAOs) promise to be an incubator for a regenerative, mutualist, and democratic economy. But if business is no longer done in firms and…
Abstract
Decentralized autonomous organizations (DAOs) promise to be an incubator for a regenerative, mutualist, and democratic economy. But if business is no longer done in firms and workers are neither employed nor managed – what else? This paper argues that a new production architecture inevitably involves an uncomfortable look at the idea of “business” itself, requiring us to reconsider deeply ingrained ideas of scale, ownership, and control. Here, you will find three provocations to institutionally reimagine DAOs for a planetary-conscious future. Bear with me.
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Tara Merk and Rolf Hoefer
Like an online carnival, Web3 aims to turn the internet’s social order upside down. Unlike a carnival, Web3 wants to be more than a weeklong party and morph into a legitimate…
Abstract
Like an online carnival, Web3 aims to turn the internet’s social order upside down. Unlike a carnival, Web3 wants to be more than a weeklong party and morph into a legitimate substitute for the internet’s status quo. Web3’s secret sauce for upheaval is decentralized, permissionless technologies, in particular blockchain technologies. In this exploratory paper, we draw on the concept of institutional isomorphism to muse about Web3’s future and to highlight the inherent tension between striving to be different from Web2 yet wanting to become more legitimate. We argue that technical merits are hardly enough to realize Web3’s high aspirations. Regulatory pressures, rampant uncertainty, and the professional norms of Web3 participants drive the space to adopt many of the organizational structures and practices that it aims to displace. To maintain divergence from Web2, despite isomorphic pressures, we suggest that it is important to increase the overall diversity of people in Web3, to double down on the value of decentralization, and to reaffirm Web3’s commitment to creatively re-imagine various institutional arrangements.
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This paper examines to what extent blockchain creates legitimacy and trust in different modes of public governance. It posits that while blockchain aims for political legitimacy…
Abstract
Purpose
This paper examines to what extent blockchain creates legitimacy and trust in different modes of public governance. It posits that while blockchain aims for political legitimacy through decentralising, immutable and consensus-based mechanisms, the execution of these mechanisms is limited in legitimating governance, which has knock-on effects on trust. It provides an original contribution by recontextualising and reframing blockchain as a governance mechanism that should, and must, perform a legitimating function in order to engender trust.
Design/methodology/approach
The research adopts a comprehensive framework for understanding the legitimacy of blockchain governance, positioning it in terms of co-governance, self-governance and hierarchical governance modes. It systematically analyses blockchain whitepapers, legislation, government documents and other sources in three paradigmatic case studies where blockchain governance failed. These cases are then used to assess blockchain according to three key characteristics of decentralisation, immutability and consensus.
Findings
The research finds that blockchain’s use in governance settings still relies on legitimacy conferred from other sources – namely state – in order to generate trust. Significant limitations in its de facto political decentralisation, immutability and consensus protocols can create failures in co-governance, self-governance and hierarchical-governance applications, thus limiting the legitimation function of blockchain in facilitating political trust.
Originality/value
These findings are significant in highlighting blockchain’s limitations as a decentralised, immutable and consensus-driven legitimating tool, which has knock-on effects on trust in technology and governance more broadly. It also has broader implications in more clearly highlighting the interconnectedness of political trust and legitimacy in governance processes.