Unveiling the Impact of Delegated Voting on Decentralized Autonomous Organizations

Research Spotlight Unveiling the Impact of Delegated Voting on Decentralized Autonomous Organizations Decentralized autonomous organizations (DAOs) represent an emerging blockchain-based organizational form built on decentralized and democratic decision making, yet their viability ultimately depends on sustained member participation. For many DAOs, however, low voter turnout and difficulty reaching quorum remain persistent challenges. To address this challenge, a growing number of DAOs have adopted delegated voting, which allows members to transfer their voting rights to others. We exploit the staggered adoption of delegated voting across DAOs to examine whether this governance innovation improves participation and decision making and what longer term consequences it may create. We find that delegated voting significantly increases voting participation with stronger effects for more complex, urgent, and operational proposals, and also improves decision quality. Over time, however, delegated voting increasingly concentrates voting power, reduces participation by new voters, and weakens continued engagement among active voters. These findings reveal a fundamental tension in decentralized governance: delegated voting can increase participation in the short term, gradually shifting decision making power toward a smaller set of participants. Our study highlights the importance of designing delegated voting arrangements that preserve the immediate benefits of greater participation, limiting longer term risks to decentralization and sustained community engagement.