Decentralizing Governance: Exploring the Dynamics and Challenges of Digital Commons and DAOs

Mark Esposito ^1* Terence Tse ¹ Danny Goh ²

• ¹ Hult International Business School, Cambridge, United States
• ² École des ponts ParisTech (ENPC), Marne-la-Vallée, Île-de-France, France

Software) projects are software initiatives that follow the principles of freedom, transparency, and collaborative development involving open access to source code and non-proprietary licensing.This paper compares the efficacy of various models and examines the extent to which the decentralized, token-based nature of blockchain networks can improve the regulation of the digital commons based on Ostrom's principles. Historically, the decentralized nature of blockchain networks has been treated as a means to democratize digital spaces by introducing multilateral forms of governance adhering to the beliefs of many users. 5 However, the expansion of blockchain technologies and cryptocurrencies in the developing world could also represent a new form of financial colonialism, where blockchain financialization perpetuates historical patterns of economic exploitation and dependency through digital networks. These challenges are not limited to the developing world but are also prevalent in industrialized nations, highlighting the global nature of digital inequality and the need for inclusive solutions 6 . Recent research has shed light 7 on the complex impacts of automated reputation and reward systems on online communities, revealing both benefits and potential drawbacks that warrant critical examination. For instance, while these systems can enhance user engagement, they may also inadvertently reinforce existing biases or create perverse incentives. 8 While blockchain networks aim to decentralize power and increase transparency, their design often reflects the assumptions and values of their creators, prioritizing efficiency over fairness or favoring users with more 5