Tokens Matter: How to Win Votes and Influence DAOs

Johannes Rude Jensen; Nina-Birte  Schirrmacher; Michel Avital; Omri Ross

Tokens Matter: How to Win Votes and Influence DAOs

Johannes Rude Jensen, Nina-Birte Schirrmacher, Michel Avital, Omri Ross

Department of Digitalization

Research output: Chapter in Book/Report/Conference proceeding › Article in proceedings › Research › peer-review

Abstract

In the span of just a few years, decentralized autonomous organizations (DAOs) have grown into a high-value form of organization. A growing body of IS literature examines the decentralized, transparent, and equitable design of these organizations. DAO governance is commonly mediated using ‘governance tokens’ in a one-token-one-vote system. However, the inconspicuous role of tokens for DAO governance is rarely investigated. We present preliminary findings from a netnographic study of controversial decision-making processes in two large DAOs. Our cases reveal how top holders of tokens leverage their favorable position to enact unpopular decisions unilaterally. The findings indicate a discrepancy between the espoused values and enacted practices of DAO governance, as economic capital rather than social capital investment becomes the primary determinant of voting power. We examine emerging alternative voting systems and offer a framework for parsing these new initiatives. Contributions to the literature and future work are discussed.

Original language	English
Title of host publication	Proceedings of the 44th International Conference on Information Systems (ICIS 2023) : Rising like a Phoenix: Emerging from the Pandemic and Reshaping Human Endeavors with Digital Technologies
Number of pages	9
Place of Publication	Atlanta, GA
Publisher	Association for Information Systems. AIS Electronic Library (AISeL)
Publication date	2023
Article number	1794
ISBN (Electronic)	9781713893622
Publication status	Published - 2023
Event	The 44rd International Conference on Information Systems: Rising Like a Phoenix: Emerging From the Pandemic and Reshaping Human Endeavors with Digital Technologies - Hyderabad, India Duration: 10 Dec 2023 → 13 Dec 2023 Conference number: 44 https://icis2023.aisconferences.org/

Conference

Conference	The 44rd International Conference on Information Systems
Number	44
Country/Territory	India
City	Hyderabad
Period	10/12/2023 → 13/12/2023
Internet address	https://icis2023.aisconferences.org/

Series	Proceedings of the International Conference on Information Systems
ISSN	0000-0033

Keywords

DAO
Governance
Tokens
Blockchain
Netnography

Access to Document

https://aisel.aisnet.org/icis2023/blockchain/blockchain/8Licence: Unspecified

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Persistent link

Cite this

Rude Jensen, J., Schirrmacher, N.-B., Avital, M., & Ross, O. (2023). Tokens Matter: How to Win Votes and Influence DAOs. In Proceedings of the 44th International Conference on Information Systems (ICIS 2023): Rising like a Phoenix: Emerging from the Pandemic and Reshaping Human Endeavors with Digital Technologies Article 1794 Association for Information Systems. AIS Electronic Library (AISeL). https://aisel.aisnet.org/icis2023/blockchain/blockchain/8

Rude Jensen, Johannes ; Schirrmacher, Nina-Birte ; Avital, Michel et al. / Tokens Matter : How to Win Votes and Influence DAOs. Proceedings of the 44th International Conference on Information Systems (ICIS 2023): Rising like a Phoenix: Emerging from the Pandemic and Reshaping Human Endeavors with Digital Technologies. Atlanta, GA : Association for Information Systems. AIS Electronic Library (AISeL), 2023. (Proceedings of the International Conference on Information Systems).

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title = "Tokens Matter: How to Win Votes and Influence DAOs",

abstract = "In the span of just a few years, decentralized autonomous organizations (DAOs) have grown into a high-value form of organization. A growing body of IS literature examines the decentralized, transparent, and equitable design of these organizations. DAO governance is commonly mediated using {\textquoteleft}governance tokens{\textquoteright} in a one-token-one-vote system. However, the inconspicuous role of tokens for DAO governance is rarely investigated. We present preliminary findings from a netnographic study of controversial decision-making processes in two large DAOs. Our cases reveal how top holders of tokens leverage their favorable position to enact unpopular decisions unilaterally. The findings indicate a discrepancy between the espoused values and enacted practices of DAO governance, as economic capital rather than social capital investment becomes the primary determinant of voting power. We examine emerging alternative voting systems and offer a framework for parsing these new initiatives. Contributions to the literature and future work are discussed.",

keywords = "DAO, Governance, Tokens, Blockchain, Netnography, DAO, Governance, Tokens, Blockchain, Netnography",

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year = "2023",

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series = "Proceedings of the International Conference on Information Systems",

booktitle = "Proceedings of the 44th International Conference on Information Systems (ICIS 2023)",

publisher = "Association for Information Systems. AIS Electronic Library (AISeL)",

note = "The 44rd International Conference on Information Systems : Rising Like a Phoenix: Emerging From the Pandemic and Reshaping Human Endeavors with Digital Technologies, ICIS2023 ; Conference date: 10-12-2023 Through 13-12-2023",

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Rude Jensen, J, Schirrmacher, N-B, Avital, M & Ross, O 2023, Tokens Matter: How to Win Votes and Influence DAOs. in Proceedings of the 44th International Conference on Information Systems (ICIS 2023): Rising like a Phoenix: Emerging from the Pandemic and Reshaping Human Endeavors with Digital Technologies., 1794, Association for Information Systems. AIS Electronic Library (AISeL), Atlanta, GA, Proceedings of the International Conference on Information Systems, The 44rd International Conference on Information Systems, Hyderabad, India, 10/12/2023. <https://aisel.aisnet.org/icis2023/blockchain/blockchain/8>

Tokens Matter: How to Win Votes and Influence DAOs. / Rude Jensen, Johannes; Schirrmacher, Nina-Birte ; Avital, Michel et al.
Proceedings of the 44th International Conference on Information Systems (ICIS 2023): Rising like a Phoenix: Emerging from the Pandemic and Reshaping Human Endeavors with Digital Technologies. Atlanta, GA: Association for Information Systems. AIS Electronic Library (AISeL), 2023. 1794 (Proceedings of the International Conference on Information Systems).

Research output: Chapter in Book/Report/Conference proceeding › Article in proceedings › Research › peer-review

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T2 - The 44rd International Conference on Information Systems

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AU - Schirrmacher, Nina-Birte

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AU - Ross, Omri

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N2 - In the span of just a few years, decentralized autonomous organizations (DAOs) have grown into a high-value form of organization. A growing body of IS literature examines the decentralized, transparent, and equitable design of these organizations. DAO governance is commonly mediated using ‘governance tokens’ in a one-token-one-vote system. However, the inconspicuous role of tokens for DAO governance is rarely investigated. We present preliminary findings from a netnographic study of controversial decision-making processes in two large DAOs. Our cases reveal how top holders of tokens leverage their favorable position to enact unpopular decisions unilaterally. The findings indicate a discrepancy between the espoused values and enacted practices of DAO governance, as economic capital rather than social capital investment becomes the primary determinant of voting power. We examine emerging alternative voting systems and offer a framework for parsing these new initiatives. Contributions to the literature and future work are discussed.

AB - In the span of just a few years, decentralized autonomous organizations (DAOs) have grown into a high-value form of organization. A growing body of IS literature examines the decentralized, transparent, and equitable design of these organizations. DAO governance is commonly mediated using ‘governance tokens’ in a one-token-one-vote system. However, the inconspicuous role of tokens for DAO governance is rarely investigated. We present preliminary findings from a netnographic study of controversial decision-making processes in two large DAOs. Our cases reveal how top holders of tokens leverage their favorable position to enact unpopular decisions unilaterally. The findings indicate a discrepancy between the espoused values and enacted practices of DAO governance, as economic capital rather than social capital investment becomes the primary determinant of voting power. We examine emerging alternative voting systems and offer a framework for parsing these new initiatives. Contributions to the literature and future work are discussed.

KW - DAO

KW - Governance

KW - Tokens

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KW - Netnography

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KW - Governance

KW - Tokens

KW - Blockchain

KW - Netnography

M3 - Article in proceedings

T3 - Proceedings of the International Conference on Information Systems

BT - Proceedings of the 44th International Conference on Information Systems (ICIS 2023)

PB - Association for Information Systems. AIS Electronic Library (AISeL)

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Y2 - 10 December 2023 through 13 December 2023

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Rude Jensen J, Schirrmacher NB, Avital M, Ross O. Tokens Matter: How to Win Votes and Influence DAOs. In Proceedings of the 44th International Conference on Information Systems (ICIS 2023): Rising like a Phoenix: Emerging from the Pandemic and Reshaping Human Endeavors with Digital Technologies. Atlanta, GA: Association for Information Systems. AIS Electronic Library (AISeL). 2023. 1794. (Proceedings of the International Conference on Information Systems).