Francisco Santos

Title: The DAO: A Million Dollar Lesson in Blockchain Governance

Supervisor: Dr. Vasileios Kostakis 

Opponent: Vasilis Niaros, PhD

Defense: 26 January 2018


Abstract: Blockchain is an underexplored research topic with increasing societal relevance. The majority of available literature deals with technical aspects, overlooking topics like governance. The Ethereum programmable blockchain and its permissionless network is steered by different actors intervening through the system and adjacent software layers. The Decentralised Autonomous Organisation (The DAO) is an autonomous Ethereum application whose functions execute a democratic investment fund. After collecting 150$ million dollars, its code was exploited to siphon funds into private control. The devised solution led to a hard-fork and a remaining duple of the Ethereum blockchain, providing a rich case study. To characterise blockchain governance, this dissertation provides a heuristic set of actors composed of developers, cryptocurrency exchanges, the Ethereum Foundation and miners. Considered the low formalisation and distributed authority in this permssionless system, micro-governance practices and mechanisms are unpacked to reflect its stewardship and associated decisions. Their influence is contextualised trough a retrospective of The DAO, detailed in relation to each`s episodic relevance within the case-study, with its governance mechanisms synthesized trough a framework of analysis of freedom and power in systems. With mapping of the existing governance systems, Peer-to-Peer theory is utilised to provide a critical point-of-view of the technology. The conclusion is this way enriched with ways forward for the different actors to engage in peer-governance of the Ethereum ecosystem and its disruptive potential of blockchain`s technological development for societal transformation.

Keywords: Blockchain, Cryptocurrencies, Blockchain Governance, Ethereum, The DAO, Power and Freedom, Cryptocurrency exchanges, miners, developers, open-source foundations