arbiter
JournalsAccount

The power of governance: A study on the relationship between on-chain DAO governance and token performance

Julie Saesen et al.

Journal of Information Technology2025https://doi.org/10.1177/02683962251343627article
AJG 4ABDC A*
Weight
0.50

Abstract

Decentralized autonomous organizations (DAOs) leverage blockchain technology to facilitate collaboration and decentralize decision-making through rules encoded in smart contracts. DAOs challenge traditional governance theory by combining ownership and management using governance tokens. A governance token’s performance is traceable based on token price changes and subject to influencing factors. Understanding these factors is essential to ensure DAOs’ long-term viability as a new organizational form. However, insights into the drivers of token performance are still limited, leaving both DAO founders and potential token holders in the dark about which on-chain governance design choices to adopt to attract potential token holders. We apply signaling theory to elucidate how on-chain governance design choices influence token performance and use a unique dataset of 204 DAOs. We find that a minimum token quorum positively relates to token performance, while embedding voting incentives, such as non-fungible tokens or additional governance tokens, can negatively relate to token performance. Moreover, we identify founders’ stake as a contingent factor moderating these signals.

Open via your library →

Cite this paper

https://doi.org/https://doi.org/10.1177/02683962251343627

Or copy a formatted citation

@article{julie2025,
  title        = {{The power of governance: A study on the relationship between on-chain DAO governance and token performance}},
  author       = {Julie Saesen et al.},
  journal      = {Journal of Information Technology},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1177/02683962251343627},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

The power of governance: A study on the relationship between on-chain DAO governance and token performance

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.