Is a "Decentralized Autonomous Organization" a Panopticon?: Algorithmic governance as creating and mitigating vulnerabilities in DAOs

Abstract

This piece explores algorithmic governance as a strength and a vulnerability in the experience of building participatory communities known as "Decentralized Autonomous Organizations". The Cypherpunks were terrified of surveillance. They envisaged the combination of cryptography and computer technology fundamentally altering the nature of trust and reputation and built cryptographically secure blockchain-based infrastructure to counter this threat. Now, not just on chain transactions are being tracked but every move of participants in blockchain communities. Reputation in blockchain systems could become the new algorithmic authoritarianism if mis-used for social control. This piece analyzes the ways in which decentralization efforts can be a threat to themselves by exploring the question, 'Are "Decentralized Autonomous Organizations" (DAOs) the next panopticon of algorithmic governance or a different panacea, and what does this mean for human autonomy in "autonomous" systems?'. By employing ethnographic methods and case study analysis, this piece provides an important qualitative contribution to the early dynamics of the aspirations and problems of decentralized, autonomous organizations.

Keywords: blockchain, cryptocurrency, algorithmic governance, autonomy, autonomous, ADM

JEL Classification: D02, D80, O33, O35, O30, Z10, Z18