{
 "@context": "https://schema.org",
 "@type": "DefinedTerm",
 "@id": "https://wulfkaal.github.io/entities/dao-failure",
 "identifier": "kaal:entity:dao-failure",
 "name": "Dao failure",
 "termCode": "dao-failure",
 "inDefinedTermSet": {
  "@id": "https://wulfkaal.github.io/entities/index.json"
 },
 "author": {
  "@type": "Person",
  "name": "Wulf A. Kaal",
  "identifier": "https://orcid.org/0000-0003-0757-275X"
 },
 "dateModified": "2026-07-29",
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   "value": 6
  },
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   "@type": "PropertyValue",
   "name": "year_span",
   "value": [
    "2020",
    "2021"
   ]
  },
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   "value": 0
  }
 ],
 "subjectOf": [
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3652481-035",
   "identifier": "kaal:claim:3652481-035",
   "text": "When the degrees of internal and external governance decentralization cancel each other out, the DAO is less likely to succeed in its decentralization attempt and correspondingly more likely to fail.",
   "abstract": "If the degrees of internal and external governance decentralization cancel each other out, the respective DAO is less likely to succeed in its decentralization attempt, which in turn makes it more likely for the DAO to fail.",
   "citation": "Wulf A. Kaal, Decentralized Autonomous Organizations – Internal Governance and External Legal Design (2020). SSRN: https://ssrn.com/abstract=3652481",
   "datePublished": "2020",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [],
   "source_pdf_sha256": "530b3a40c244aeca2eb4c53f4c9b4d6b2962bd6be9f92b4ebe17139c17f4c0e0",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782210-006",
   "identifier": "kaal:claim:3782210-006",
   "text": "The failure of many DAOs to date is traceable to their reliance on the good will of network members rather than on engineered incentives.",
   "abstract": "The failure of many DAOs, so far, has been their reliance on the good will of the members of the network.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of Reputation for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782210",
   "datePublished": "2021",
   "claim_type": "failure",
   "confidence": "asserted",
   "is_failure_mode": true,
   "scope_conditions": [
    "decentralized autonomous organizations observed to date"
   ],
   "source_pdf_sha256": "9cc531ab239f6266c8aeddcc8e54f4c06029c44e825444bee137bbcc0c9d0a8e",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3782210-007",
   "identifier": "kaal:claim:3782210-007",
   "text": "As a network grows its members become more anonymous and individually less important, which makes cheating more locally enticing and less globally noticeable, so the system eventually collapses once cheating is obviously the best individual strategy.",
   "abstract": "As the network grows, however, the members become more anonymous. Individually they become less im- portant, so cheating is more locally enticing and less noticeable globally. Eventually (or immediately) the system will collapse when it becomes obvious cheating is the best individual strategy.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, The Importance of Reputation for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782210",
   "datePublished": "2021",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "networks that grow large",
    "networks lacking a secure reputation mechanism"
   ],
   "source_pdf_sha256": "9cc531ab239f6266c8aeddcc8e54f4c06029c44e825444bee137bbcc0c9d0a8e",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3799320-001",
   "identifier": "kaal:claim:3799320-001",
   "text": "The concept of a DAO fails if it becomes centralized, and centralization in governance is the largest single threat to a DAO.",
   "abstract": "The concept of a DAO fails if it becomes centralized. Centralization is omnipresent in computing systems, economics, and society at large. Yet centralization in governance is perhaps the largest threat to a DAO.",
   "citation": "Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320",
   "datePublished": "2021",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [],
   "source_pdf_sha256": "c3dff852f2d3f04718c829a24189309a7db4d92d84f6045d3d4f562d87c03e63",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3799320-002",
   "identifier": "kaal:claim:3799320-002",
   "text": "Decentralized governance must be dynamic and evolutionary, otherwise the system becomes centralized and brittle over time; most DAOs fail to accomplish this.",
   "abstract": "Decentralized governance has to be dynamic and evolutionary in order to avoid for the system to become, over time, centralized and brittle. Most DAOs fail to accomplish this.",
   "citation": "Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320",
   "datePublished": "2021",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "governance that must persist over time",
    "systems relying on information from the edges"
   ],
   "source_pdf_sha256": "c3dff852f2d3f04718c829a24189309a7db4d92d84f6045d3d4f562d87c03e63",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3799320-003",
   "identifier": "kaal:claim:3799320-003",
   "text": "Tying a DAO's legal existence to existing legal and jurisdictional frameworks typically requires a representative in the chosen jurisdiction, which centralizes the DAO and results in the failure of the DAO concept.",
   "abstract": "Tying the legal existence of a DAO to any forms of existing legal and jurisdictional frameworks typically results in the need for a representative in the chosen legal framework and jurisdiction, which, in turn, centralizes the DAO and results in the failure of the DAO concept.",
   "citation": "Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320",
   "datePublished": "2021",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "DAO anchored in an existing jurisdiction",
    "frameworks that require local representation"
   ],
   "source_pdf_sha256": "c3dff852f2d3f04718c829a24189309a7db4d92d84f6045d3d4f562d87c03e63",
   "status": "current"
  }
 ],
 "description": "6 claims in the published works of Wulf A. Kaal carry the concept tag 'dao-failure'. Derived node: a roster, not an adjudicated definition."
}