Distributed governance and value creation in decentralized autonomous organizations: Evidence from a regression discontinuity design

Valerio Lo Monaco, Paul Momtaz and Silvio Vismara

Economics Letters, 2025, vol. 248, issue C

Abstract: Distributed governance mechanisms increase tokenholders value in decentralized autonomous organizations (DAOs) when decision-making is contested. Using a comprehensive dataset of proposals voted on within blockchain-based DAOs from 2020 to 2024, we exploit a regression discontinuity design on proposals that pass or fail by a close margin around the majority threshold. Local average treatment effects indicate that proposal passage increases DAO token returns by 4.7 % at the margin. Further, a one standard deviation increase in vote participation amplifies this effect by 2.2 %. Proxies for democratization and decentralization also increase the value-creating effect of contested decision-making in DAOs. Our findings contribute to understanding how distributed governance structures create value in digital organizations.

Keywords: Blockchain; Tokens; Decentralized autonomous organizations; Corporate governance; Shareholder activism (search for similar items in EconPapers)
JEL-codes: G34 M13 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:248:y:2025:i:c:s0165176525000709

DOI: 10.1016/j.econlet.2025.112233

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