Check out the episode:
You can find the shownotes through this link.
Are you interested in decentralised autonomous organisations, also known as DAOs?
Our debate today works with the book chapter titled Decentralized Autonomous Organisations (DAOs) adoption for smart city governance from 2025, by Aiman Erbad, published in the Blockchain and Applications, 6th International Congress book.
This is a great preparation to our next interview with Adam Miller in episode 370 talking about DAOs and their connection to the future of cities.
Since we are investigating the future of cities, I thought it would be interesting to see how a new decentralised governance model can influence the future of cities. This chapter investigates how DAOs could address challenges in citizen participation and distributed decision-making in rapidly urbanising centres.
[intro music]
Welcome to today’s What is The Future For Cities podcast and its Research episode; my name is Fanni, and today we will introduce a research by summarising it. The episode really is just a short summary of the original investigation, and, in case it is interesting enough, I would encourage everyone to check out the whole documentation. This conversation was produced and generated with Notebook LM as two hosts dissecting the whole research.
[music]
Speaker 1: today, we’re wrestling with a proposal that could really fundamentally redefine civic life. The potential adoption of blockchain-based, decentralized, autonomous organizations, DAOs as the foundational governance infrastructure for smart city initiatives. We know cities worldwide are grappling with massive challenges from climate change response, housing affordability, all demanding innovative tech solutions, and critically deep cooperation between citizens, businesses, and government.
Speaker 2: And that demand for deeper cooperation is well precisely What makes the Dow model so attractive yet? I think so perilous. The idea is pretty simple. On the surface. Use rules encoded as smart contracts. To establish trust distributively moving beyond a central, often bureaucratic authority. But the central question here, the real debate, is whether this specific approach to configuring civic power, this DAO model can genuinely achieve participatory and crucially fair public governance in a complex urban setting, or do the intrinsic structural challenges and inherent threats just present insurmountable barriers for. Traditional citywide adoption.
Speaker 1: Why firmly stand on the side of transformative potential? I really believe the Dow model offers revolutionary tools to enhance participation and distribute decision making power. The challenges we identify, look, they’re not fatal flaws. They’re simply manageable adoption hurdles that yes, require careful preparation and resource allocation.
Speaker 2: And I conversely feel I have to focus on the intrinsic issues. Of social equity inclusion and the management of external threats. These aren’t just simple hurdles. They are fundamental barriers that pop up when you try to implement a crypto native governance model within a public urban environment that demands equal rights for all its citizens.
Speaker 1: Okay? So to understand the potential we have to recognize where traditional governance is maybe falling short. Most smart city governance today is stuck in what you might call low transformation. It amounts to little more than efficient administration, but the rapid scale and complexity of these wicked problems, those massive interconnected issues facing urbanization, they demand a leap toward high transformation, and that requires genuine cooperation among all stakeholders. DEOs, I believe, provide the mechanism for that leap. They pull successful governance lessons from existing Web3 0.0 communities and deploy transparent immutable rules via smart contracts. Essentially decentralizing reliance on single, often exclusive centralized authorities. The real innovation though, lies in the way DAOs restructure civic participation, what the research calls the power configuration. They offer clear, dynamic incentives that go far beyond traditional civic duty or just being consulted. We aren’t just talking about, say, token appreciation, although that’s potentially part of it. We’re talking about micro incentivizing specific civic actions using bounties, for example, to reward residents who complete an initial feasibility study for a neighbourhood green space, or maybe those who propose solutions for traffic congestion. This system ensures people have a tangible reason to play a bigger role in the planning and governance. Which directly addresses performance expectation by offering clear usefulness over existing governance structures that, let’s be honest, often suffer from low participation and pervasive mistrust.
Speaker 2: Okay. I come at it from a different angle though. Well, that ideal of high transformation sounds wonderful. The qualitative research done with experts really reveal that when you try to translate this idea into practice, to areas the actual mechanics of power. And the necessary risk mitigation introduce profound governance risks that are frankly unique to this technology. My core issue is inclusion. DAOs, as they stand currently cater almost exclusively to digital natives, right? Those already immersed in the technology. This means the structure inherently exclude significant demographic segments like senior citizens, maybe people in low resource communities, lacking reliable tech access as the experts noted. Public services need to meet the people where they are not force citizens to climb some steep digital wall just to participate. If the smart city governance model can’t seamlessly include all citizens, it fundamentally fails the definition of public governance.
Speaker 1: That’s an interesting point though. I would frame it a bit differently while the question of fairness and power configuration is absolutely essential. Let’s look closer at the operational tension that token ownership inevitably generates the challenge of achieving deep decentralization while still maintaining necessary governance, rigor, and accountability. You seem to imply that decentralization automatically leads to chaos or instability, but look, the fundamental goal of a DAO is transparent, participatory decision making. Experiments like C Dow ran into issues, specifically inconsistency and maybe a lack of accountability in getting proposals finalized. They adapted, they didn’t just throw up their hands. They used specific mechanisms like forming guilds or temporary committees to handle technical tasks. And crucially, they eventually proposed hiring, dedicated full-time employees to increase operational rigor and consistency. This shows the model is adaptable. It’s not rigidly ideological. We can maintain the distributed nature of the rulemaking and voting while integrating the managerial rigor needed to run efficient services.
Speaker 2: I’m sorry, but I just don’t quite buy that adaptability argument. Let me tell you why hiring full-time employees FTEs, that’s a perfect illustration of the structural ambiguity I mentioned earlier. If the community hires employees to ensure consistency and accountability, who directs those employees? Who sets their mandate? Who judges their performance? The Dow model in trying to solve its internal consistency problems, risks, actually recentralizing operational power, and thus accountability in a potentially non-transparent way. The expert informants were worried about these really foundational questions. Who will decide the decentralization limits and how do you manage decentralization the moment you introduce human employees to manage the Dao? You introduce this inherent tension between that radical decentralization ideal and the necessary operational rigor that could lead to instability or worse ambiguity about who actually owns the DAOs evolution and decisions. And that just seems unsuitable for mission critical city functions. And that issue of who is excluded by design is critical. Let’s just circle back quickly to social exclusion and digital equity. You suggested that excluding non-digital natives is just an operational hurdle. I have to assert that the inclusion concern is fundamental to the legitimacy of the entire model. Smart city governance must include all citizens by design. If the initial setup requires a steep learning curve, specific hardware or constant digital interaction, which current DAO structures absolutely demand. It inherently biases power toward those with existing digital literacy and resources. The fact that C Dao and similar experiments primarily cater to the crypto savvy, well, it just proves this exclusion is baked into the technology’s complexity, not merely a matter of education.
Speaker 1: I see why you’d think that, but let me offer a different perspective while inclusion is completely non-negotiable. I think framing the difficulty of adoption as a fatal flaw in the governance structure itself, maybe misplaces the responsibility. This is more accurately defined, I believe, as a challenge and effort expectancy the perceived ease of use. Yes. Okay. Blockchain technology historically presents a steep learning curve, but that curve can be managed. The solution isn’t to reject a potentially powerful new form of governance outright. It’s to prioritize accessible infrastructure. This means implementing extensive public education campaigns, running small scale focused experiments, and crucially piloting solutions that are genuinely easy to use, thereby reducing that perception of technological complexity. We shouldn’t confuse the difficulty of initial user onboarding with some kind of structural inability to govern fairly. Technology evolves rapidly. Accessibility will follow if it’s prioritized. Now let’s maybe pivot to the issue you raised regarding external risks, which falls under threat management. This is often cited as the biggest obstacle I know, but I’d argue it’s highly manageable when you view it through the lens of the organizational context. Basically, the whole ecosystem surrounding the city. Administration, threats related to financial risk, reputational damage from crypto volatility, even data privacy. These are controllable factors. Controllable, yes, controllable. The solution isn’t to avoid the technology. But to provide the necessary enablers, internal resources, meaning the human and financial infrastructure, you need to manage the systems and critically robust external regulations. By putting transparent regulations and institutional oversight in place, we can control the narrative, build the necessary public trust, and effectively manage resistance from external stakeholders, whether that’s incumbent industries, wary of decentralized competition, or maybe national decision makers suspicious of distributed power.
Speaker 2: That’s a compelling argument regarding managing the organizational context. I’ll grant you that, but the threat level, particularly regarding data privacy just feels too high. This concern fundamentally clashes with the transparency. Often inherent in Dow governance, all the experts consulted, viewed the kind of comprehensive tracking as seen in social media is dangerous, especially when the DOW governance model proposes these open communities for data exchange. People already harbor profound worries about their privacy being violated by both government and large corporations. Proposing an open, transparent, potentially immutable ledger like blockchain for critical city functions is just inherently risky. Citizens are rightly concerned that a highly transparent governance system combined with mandatory digital interaction could expose sensitive participation data until these structural privacy concerns, which go way beyond reregulation. Really touch on the core function of the technology itself are fully secured and crucially trusted by the populace. The adoption of a Dow model for critical urban services seems practically untenable to me.
Speaker 1: This discussion certainly highlights the extreme complexity involved in integrating novel technology into civic life. No doubt about it, but to summarize my position, while robust preparatory work is absolutely essential. Especially securing the necessary resources and regulations within that organizational context. The DAO governance model remains, I think, the most compelling pathway toward truly participatory governance and operational transparency. It aligns the city with the highest potential levels of smart urban transformation. The innovative incentives and decentralized structure provide the necessary tools to engage citizens effectively. Our current centralized, often opaque governance structures consistently fail,
Speaker 2: and my position remains focused squarely on the social cost. The structural mechanisms of DAOs introduce serious intrinsic questions of social equity and fairness, specifically that link between token based voting and digital inclusion that fundamentally jeopardize their moral and practical legitimacy for broad public governance. Until the intrinsic issues within how power configuration operates are properly reconciled, and the profound threat management challenges, particularly concerning citizen data privacy are robustly secured and widely trusted. DAOs risk exacerbating existing social divides rather than delivering equitable solutions to our urban challenges.
Speaker 1: Ultimately, what this debate really illustrates is that decision makers face a difficult choice. They have to undertake a complex. Cost benefit analysis between the efficiency and engagement promise by decentralization.
And on the other hand, the non-negotiable necessity of guaranteed equitable representation for every single citizen in public governance indeed
Speaker 2: and the path forward requires I think, much more rigorous examination of those critical trade-offs.
[music]
What is the future for cities podcast?
Episode and transcript generated with Descript assistance (affiliate link).
What is the future for cities? podcast 
Leave a comment