Decentralized Autonomous Organizations (DAOs) as Innovative Means to Supplement Transition Governance

Abstract

The following contribution explains how a DAO (Decentralized Autonomous Organization) can technologically supplement the governance process in complex environments, in this case urban environments where Fab City is active. DAOs are implementations of the blockchain technology which can be considered as coordination tools and de facto “decentralized ERP* (Enterprise Resource Planning) systems on the internet”. They can enable organizations and communities to address challenges that are otherwise too complex in a tangible, dynamic and sustainable manner which caters to the general need for transition governance. To facilitate collaboration and coordination, the idea of a DAO is to effectively capture the various rule sets, actor constellations and general conditions to address the four universal problems in organizing-task division, task allocation, reward distribution, and information flows. The following conceptualization aims to provide a practical solution alternative to supplement cooperation and coordination between various actors within the wider ecosystem using a DAO. The current state of blockchain and DAO research serves as a rich backdrop when exploring the given opportunity and shedding light on the most important requirements, risks, and success factors. Despite remaining challenges in particular the legal domain, the focus of this article is to showcase how a progressive path forward can lead to a setting in which DAOs can be successfully integrated and become an operational part of an urban environment.