Decentralized autonomous organizations – Evolution, challenges, and opportunities

Abstract

A decentralized autonomous organization (DAO) is an emerging entity facilitated through blockchain technology. It operates under the principle of a decentralized governance structure void of hierarchical leadership, and decisions are made based on community consensus. As DAO and its mechanisms are still in an early stage, its potential evolution and future influence on enterprises remain unclear. This work elaborates on this emerging type of organization through a literature review and case studies of DAOs to demonstrate the current state of the art. The findings presented include a brief discussion of the technology that facilitates these organizations. Additionally, advancements and the common characteristics of existing DAOs are presented. Examining current and defunct DAOs revealed the challenges these organizations should address to reach their full potential in future application areas. Finally, it is concluded which organizations and industries could most likely benefit from the DAO concept in future.