The Hidden Shortcomings of (D)AOs -- An Empirical Study of On-Chain Governance

• URL: http://arxiv.org/abs/2302.12125v1
• Date: Thu, 23 Feb 2023 16:08:48 GMT
• Title: The Hidden Shortcomings of (D)AOs -- An Empirical Study of On-Chain Governance
• Authors: Rainer Feichtinger, Robin Fritsch, Yann Vonlanthen and Roger Wattenhofer
• Abstract summary: We study the on-chain governance systems of 21s and open source dataset. Thes we study are of various size and activity, and govern a wide range of protocols and services, such as decentralized exchanges, lending protocols, infrastructure projects and common goods funding. Our analysis unveils a high concentration of voting rights, a significant hidden monetary costs of on-chain governance systems, as well as a remarkably high amount of pointless governance activity.
• Score: 19.365303082741057
• License: http://arxiv.org/licenses/nonexclusive-distrib/1.0/
• Abstract: Decentralized autonomous organizations (DAOs) are a recent innovation in organizational structures, which are already widely used in the blockchain ecosystem. We empirically study the on-chain governance systems of 21 DAOs and open source the live dataset. The DAOs we study are of various size and activity, and govern a wide range of protocols and services, such as decentralized exchanges, lending protocols, infrastructure projects and common goods funding. Our analysis unveils a high concentration of voting rights, a significant hidden monetary costs of on-chain governance systems, as well as a remarkably high amount of pointless governance activity.

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