DAO_Sustainability_Analysis

This is the replication package of the paper.

Abstract: Decentralised Autonomous Organisations (DAOs) automate governance and resource allocation through smart contracts, aiming to shift decision-making to distributed token holders. However, many DAOs face sustainability challenges linked to limited user participation, concentrated voting power, and technical design constraints. This paper addresses these issues by identifying research gaps in DAO evaluation and introducing a framework of Key Performance Indicators (KPIs) that capture governance efficiency, financial robustness, decentralisation, and community engagement. We apply the framework to a dataset of real-world DAOs using on-chain data and non-parametric analysis. The results reveal recurring governance patterns, including low participation rates and high proposer concentration, which may undermine long-term viability. The proposed KPIs offer a replicable, data-driven method for assessing DAO governance structures and identifying potential areas for improvement. These findings support a multidimensional approach to evaluating decentralised systems and provide practical tools for researchers and practitioners working to improve the resilience and effectiveness of DAO-based governance models

Files Uploaded

• DAO_Sustainability_Analysis.ipynb:
  Description: A Google Colab notebook that contains the full code for statistical analyses, and generation of all figures (box plots, scatter plots, radar charts, etc.).
  Format: .ipynb
  
• dao-metrics.json:
  Description: The distilled JSON dataset containing processed DAO metrics (50 DAOs), used to calculate the KPIs.
  Format: .json

• README.md: This documentation file, includes detailed replication instructions.

• Metadata Details: Keywords: Decentralized Autonomous Organizations, DAO, Blockchain, Voting Mechanisms, Decentralization, Governance, Sustainability, Longevity, Key Performance Indicators, User Participation.
  Licence: Specify the appropriate open licence (e.g. CC BY 4.0).

This research investigates the sustainability and longevity of Decentralised Autonomous Organisations (DAOs) through the quantitative evaluation of on-chain governance metrics. Our study addresses the research questions: (1) Which key performance indicators (KPIs) effectively capture the operational health of DAOs? (2) How do social, economic, procedural, and structural aspects interrelate to influence the long-term viability of these organisations? and (3) How does the application of these KPIs to a distilled dataset of DAOs reveal governance challenges and inform strategies for structural improvement?

To this end, we developed a comprehensive KPI framework encompassing four dimensions:

• Network Participation (the proportion of active members),
• Accumulated Funds (the financial capacity as measured by treasury size and token circulation),
• Voting Mechanism Efficiency (balancing approval rates and voting duration), and
• Decentralisation (assessed via token concentration and on-chain automation).

Using a distilled dataset of 50 DAOs across Ethereum, Polygon, and Arbitrum, we applied rigorous statistical tests, including the Shapiro–Wilk test, Levene’s test, and, where appropriate, one-way ANOVA or the non-parametric Kruskal–Wallis test, to validate our methods. Visualisations (box plots, scatter plots, pair plots, heat maps, and radar charts) were generated to elucidate inter-metric relationships and highlight group differences across the KPI categories. Notably, our findings reveal that DAOs with higher participation rates, more balanced treasury distributions, efficient voting practices, and lower concentration of token ownership tend to exhibit superior composite scores, suggesting stronger governance structures and enhanced sustainability.

The replication package provided herein includes all Colab notebooks, scripts, and the processed JSON dataset required to reproduce the analyses and visualisations presented in our work. This package adheres to FAIR principles and is intended to promote transparency, facilitate data re-use, and encourage future research in blockchain governance and DAO sustainability.