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DAO Governance: Voting Power, Participation, and Controversy - A Review and an Empirical Analysis

Combining a systematic literature review with a novel empirical study of major DAO protocols, this paper investigates the tensions between theoretical governanc

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Abstract

Combining a systematic literature review with a novel empirical study of major DAO protocols, this paper investigates the tensions between theoretical governance ideals and on-chain realities. The researchers utilize transaction-level data to analyze participation rates, whale influence, and the impact of controversy-driven governance proposals. The paper finds that the concentration of voting power is a pervasive issue, often exacerbated by liquidity mining and token delegation mechanisms. By examining specific instances of contentious voting, the study provides a granular view of how community discourse translates into protocol changes. The results challenge the narrative of ‘code as law,’ suggesting that social signaling and informal off-chain power structures play an equally significant role in determining organizational trajectory. This empirical grounding offers a realistic counterpoint to more idealistic depictions of decentralized management. Authors: Markus Jungnickel, Ferda Özdemir Sönmez, Cathy Mulligan, William J. Knottenbelt Publication: Academic Paper Publication date: 2025-01-01

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Key findings

  • Voter participation remains critically low, often relying on a small minority of active stakeholders.
  • Token delegation mechanisms frequently concentrate power rather than distributing it among a broader community.
  • Controversy-driven proposals correlate with higher, though often reactive, community engagement.
  • The distinction between formal on-chain voting and informal social governance remains a primary point of friction.

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Citation

Markus Jungnickel, Ferda Özdemir Sönmez, Cathy Mulligan, William J. Knottenbelt (2025). DAO Governance: Voting Power, Participation, and Controversy - A Review and an Empirical Analysis. Academic Paper. https://dl.acm.org/doi/10.1145/3777416
Canonical knowledge ID: research:dao-governance-voting-power-participation-and-controversy-a-review-and-an-empirical-analysis