# kaal:claim:3808873-037

**Claim.** Effective institutional governance, human or machine, requires a duality of incentives in which actors improve their own utility while their actions benefit the whole institution over the long run, and without that duality rational and opportunistic constituents will game the governance design.

**Type.** condition  **Support.** argued

**Holds when.**

- DAO governance designs facing internal and external opportunistic actors

**Source quote.**

> Human nature and any effective machine derivates of human engagements in institutional form require a duality of incentives in order to overcome attempts of rational and opportunistic internal and external constituents to game the governance design of a given DAO.

**From.** Wulf A. Kaal, *Decentralization Neutralizers* (2021), XI. Lack of Decentralized Governance Systems, page 30

**Cite as.** Wulf A. Kaal, Decentralization Neutralizers (2021). SSRN: https://ssrn.com/abstract=3808873

**Verify.** sha256 of source PDF `f11493915e6b8c266d421510b5546816e33defb5650aac9d09b20d78549da727` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202021%20-%20Decentralization%20Neutralizers.pdf

**Failure mode.** Incentive Duality Failure  (family: staking-and-incentive-misalignment)

**Topics.** risk-and-incentives, dao, governance-design

**Keywords.** incentive-design, dao-governance, opportunism, duality-of-incentives

**Related claims.**

- extends: https://wulfkaal.github.io/claims/3652481-019
- restates: https://wulfkaal.github.io/claims/3799320-013
- restates: https://wulfkaal.github.io/claims/3441904-018

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.