By leveraging variation in the adoption of delegated voting across DAOs, it is found that delegated voting increases members’ participation in proposal voting and enhances decision quality, and highlights the need for DAOs to balance the short-term gains from higher participation with the potential long-term risks to decentralization.
Abstract
A decentralized autonomous organization (DAO) is a novel form of blockchain-based organization designed for collective decision-making. As DAOs emphasize a decentralized, democratic decision-making approach, participation serves as the foundation for their sustainable operation and development. Unfortunately, many DAOs struggle with low participation rates, often falling short of the required quorum. To address this critical issue, an increasing number of DAOs have adopted delegated voting, which allows members to transfer their voting rights to others. However, the impact of delegated voting within the DAO context remains unknown. By leveraging variation in the adoption of delegated voting across DAOs, we find that delegated voting increases members’ participation in proposal voting and enhances decision quality. Our results further show that delegated voting stimulates greater participation in proposals with higher participation costs, including those that are more complex, urgent, or operational in nature. However, in the long term, delegated voting also leads to greater voting power concentration and reduces engagement from both new and active voters, potentially harming sustained participation and the growth of the DAO community. Overall, our findings highlight the need for DAOs to balance the short-term gains from higher participation with the potential long-term risks to decentralization.
Decentralized Autonomous Organizations (DAOs) use token-weighted voting to allocate resources, set protocol rules, and legitimate collective decisions. Yet, support in DAO voting is strikingly concentrated. What happens inside the ballot that produces this concentration? We study DAOs'governance at the proposal-choice level, linking each choice's voting-power share to three observable features: whether it expresses an approval-oriented stance, where it appears in the choice list, and whether it is selected by the proposal author. We find that (i) author-selected choices show the strongest and most robust association with voting-power share, with a 58.8% increase relative to non-author choices; (ii) approval-oriented choices retain a positive but slightly less consistent advantage (27.1%); and (iii) first-listed choices also attract systematically higher shares, consistent with position and order effects (7.7%). Results are robust across several specifications, which include subtracting an author's own voting power from computations. We use bias descriptively, to denote systematic associations rather than proven causal distortion. The results shift attention from proposal outcomes alone to the interface and social signals through which choices are presented. In DAO governance, ordering, author signals, and vote visibility should be treated as institutional design choices, not neutral implementation details.
Stefano Balietti, Pietro Saggese, Markus Strohmaier· arXiv.org· 0 citations
This work explicates the trust and transparency trade-offs of the design choices in implementing a DAO and highlights how poor choices introduce critical vulnerabilities, using real-world examples as case studies.
Vabuk Pahari, B. Chandrasekaran, Johnnatan Messias et al.· arXiv.org· 0 citations
In multilateral environmental agreements, procedural fairness depends not only on a Party's right to attend but on its capacity to participate. We examined which Party‐level traits predict delegation size at the Convention on International Trade in Endangered Species (CITES) Conferences of the Parties (CoPs) and how delegation size shapes voting and working group participation when Committees meet concurrently. Using Bayesian multilevel models, we analyzed attendance, voting records, and working‐group rosters for CoP16–20. On average, 10% of Parties sent no delegates and 16% sent just one, while Committees I and II overlapped for 80% of session time. Small island developing Parties more frequently sent one‐person delegations. CITES working‐language match, OECD membership, and stronger national CITES legislation predicted larger delegations. Voting and working group participation rose with delegation size. One‐person delegations were more often absent, or ineligible to vote due to credential issues, with Committee II most affected. Under present‐and‐voting rules, coordinated blocs and sparse presence can shape outcomes. Because the most constrained Parties are often lower‐middle‐income range states expected to implement listings, these gaps weaken input legitimacy and voluntary compliance. Options include credential pre‐checks, retargeted sponsorship ensuring at least two delegates per Party, and scheduling or hybrid adjustments.
Freyja Watters, Phillip Cassey· Conservation Science and Pra...· 0 citations
The study reveals that while DAOs hold significant potential—particularly in local-scale, narrow-purpose, and participatory budgeting-style processes—fundamental barriers exist regarding legitimacy, accountability, and legal recognition that hinder macro-level substitution.
Ahmet Melih Karauğuz, Ali Yıldırım· Akademik yaklaşımlar dergisi· 0 citations
The future architecture of financial systems is a subject of contention, with centralized and decentralized governance proponents. Here, we ask the following question. Would the architecture affect the quality of decision making? We propose a game where financial network participants demarcate the ownership of claims to income. This governance task can be decentralized (shared authority), centralized (single authority), or hybrid (alternating authority). Without communication, all architectures supported poor outcomes. With communication, decentralization ensured good governance and maximum profits, whereas centralization did not—lowering communication’s potency in promoting socially optimal decisions. This indicates that there is scope for decentralization in innovating financial institutions.
This paper has been accepted by Camelia Kuhnen for the Virtual Special Issue on Digital Finance.
Funding: N. Chemaya acknowledges partial financial support from the NET Institute.
Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2025.02314 .
Gabriele Camera, G. Charness, Nir Chemaya· Management Sciences· 0 citations
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