State of DAO M&A

Abstract

Mergers and acquisitions (M&A) are a well-established mechanism for growth and consolidation in traditional markets. Decentralized autonomous organizations (DAOs), by contrast, are a nascent organizational form-internet-native, community-governed entities operated via blockchain smart contracts and token-based voting. DAO M&A is a novel phenomenon where a DAO merges with, acquires, or is acquired by another entity-whether another DAO or a traditional company-in order to form a combined entity under shared governance. Since 2020, we have seen at least 65 M&A deals involving DAOs. This report provides an overview of the state of DAO M&A. We examine four key case studies of DAO mergers, analyze the financial metrics and deal structures involved, discuss the governance challenges encountered in merging decentralized communities, and explore the legal and regulatory considerations unique to DAO M&A. Finally, we consider the future outlook for these transactions. Throughout, we cite relevant examples and data to illustrate the current landscape of DAO mergers and acquisitions.

Keywords: Mergers and acquisitions, Blockchain, Decentralized Autonomous Organizations, DeFi, Valuation, Voting, Governance, Joint ventures, Tokenswaps