Journal Article
The surge in decentralized autonomous organizations (DAOs) since 2018 arguably represents the “great decentralization experiment” of our times. Traditionally, firms align actors through financial incentives and centralized authority; communities motivate through shared values and self-selection. DAOs, in their ideal form, promise to combine the scalability of the former with the participation of the latter. A growing body of research on individual DAOs, however, casts doubt on whether this promise is fulfilled. What do DAOs’ departures from their design aspirations reveal about decentralization, autonomy, and organization itself? The authors study this question using DeepDAO, the largest systematic dataset on DAOs to date. Their findings confirm that most DAOs are not meaningfully decentralized, autonomous, or coherently organizational. Studying these departures from design aspirations yields three theoretical recalibrations. First, decentralization operates differently at different levels: The DAO ecosystem is decentralized, but individual DAOs are not. Decision-making power in DAOs is concentrated through asymmetries in token ownership and chronically low participation. Second, autonomy is polysemous in ways that the DAO experiment lays bare: the term conflates automation with independence, and most DAOs achieve neither. Third, low participation rates and de facto concentration of decision-making rights reframe the question of what it means to be an organization at all, not as a binary condition but as a profile of degrees across multiple dimensions. DAOs thus force a re-specification of concepts that organization science has long treated as settled and illuminate the limits of technology as a decentralizing force.
Faculty
Professor of Strategy
