ETSI GR PDL 029 V1.1.1 (2025-02)

Permissioned Distributed Ledger (PDL); Distributed Autonomous Organization (DAO)

DGR/PDL-0029_Digi_Auto_Orga

General Information

• Status: Not Published
• Technical Committee: PDL - Permissioned Distributed Ledger
• Current Stage: 12 - Citation in the OJ (auto-insert)
• Due Date: 27-Mar-2025
• Completion Date: 28-Feb-2025

Standards Content (Sample)

GROUP REPORT
Permissioned Distributed Ledger (PDL);
Digital Autonomous Organization (DAO)
Disclaimer
The present document has been produced and approved by the Permissioned Distributed Ledger (PDL) ETSI Industry
Specification Group (ISG) and represents the views of those members who participated in this ISG.
It does not necessarily represent the views of the entire ETSI membership.

2 ETSI GR PDL 029 V1.1.1 (2025-02)

Reference
DGR/PDL-0029_Digi_Auto_Orga
Keywords
data interoperability, data models, PDL

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3 ETSI GR PDL 029 V1.1.1 (2025-02)
Contents
Intellectual Property Rights . 9
Foreword . 9
Modal verbs terminology . 9
Executive summary . 9
Introduction . 10
1 Scope . 11
1.1 In Scope . 11
1.2 Out of Scope . 12
2 References . 12
2.1 Normative references . 12
2.2 Informative references . 12
3 Definition of terms, symbols and abbreviations . 13
3.1 Terms . 13
3.2 Symbols . 14
3.3 Abbreviations . 14
4 Definition of a DAO . 15
4.1 Foreword . 15
4.2 Current definition . 15
4.3 Current Implementations . 16
4.4 Differences between a DAO and traditional organizations . 16
5 Recommendations to operate a DAO . 16
5.1 Foreword . 16
5.2 Key components of a DAO . 17
5.2.1 Implementation Agreements . 17
5.2.2 Governing Entity . 17
5.2.3 Smart Contracts . 17
5.2.4 Data Models . 17
5.2.5 Processes . 17
5.2.6 Ledgers . 17
5.2.7 Codebase . 18
5.2.7.1 Definition of a codebase . 18
5.2.7.2 Open Source . 18
5.2.7.3 Proprietary code . 18
5.2.8 Ledger type . 18
5.2.8.1 Blockchain attributes . 18
5.2.8.2 Functional division of Blockchain . 18
5.2.8.3 Multi-Blockchain scenarios. 19
5.2.9 Validating nodes . 19
5.2.10 Non-validating nodes . 19
6 Operating a DAO . 19
6.1 Foreword . 19
6.1.1 Current DAO Implementations . 19
6.1.2 Challenges of Single-Software/Code-development Implementations . 19
6.1.3 Composite DAOs . 19
6.1.4 DAO Types Defined in this Document . 20
6.1.5 Document Structure . 20
6.2 Single Ledger DAO environment . 20
6.2.1 Single Ledger considerations . 20
6.2.1.1 Codebase . 20
6.2.1.1.1 Components of the Codebase . 20
6.2.1.1.2 Sources of the Codebase . 20
6.2.1.1.3 Implications of Single Codebase . 21
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4 ETSI GR PDL 029 V1.1.1 (2025-02)
6.2.1.2 Nodes . 21
6.2.1.3 Governance . 21
6.2.1.3.1 Concept of Autonomy . 21
6.2.1.3.2 Governance Mechanisms . 21
6.2.1.3.3 Evolution of the Governing Entity . 21
6.2.1.3.4 Key Tasks of the Governing Entity . 21
6.2.1.3.5 Further Discussion . 22
6.3 Hybrid DAO environment . 22
6.3.1 Hybrid DAO environment considerations . 22
6.3.2 Types of Hybrid environments . 22
6.3.2.1 Multi Ledger . 22
6.3.2.2 Multi Vendor . 22
6.3.2.3 Multi codebase . 22
6.3.3 Multi-Ledger Interoperability . 23
6.3.3.1 Challenges of interoperability . 23
6.3.3.2 Data Interoperability . 23
6.3.3.3 Consensus interoperability . 23
6.3.3.4 Smart-Contract interoperability. 23
6.3.4 Multi Vendor/Codebase . 24
6.3.4.1 Aspects of Multiple vendors/codebases . 24
6.3.4.1.1 Operational flow of a platform . 24
6.3.4.1.2 Data Structure . 24
6.3.4.1.3 Platform Architecture . 24
6.3.4.1.4 Processes . 24
6.3.4.2 Data Model alignment . 25
6.3.4.3 Architectural alignment . 25
6.3.4.3.1 Functional Blocks . 25
6.3.4.3.2 Interface Reference Points . 25
6.3.4.4 Process alignment . 26
6.3.4.4.1 Parallel Processing . 26
6.3.4.4.2 Process Expectations . 26
6.3.4.4.3 Process Perspectives . 26
6.3.4.4.4 Inter-ledger Communication . 26
6.3.4.4.5 Challenges and Considerations . 26
6.3.4.4.5.1 Common Challenges . 26
6.3.4.4.5.2 Potential solutions for developers to consider . 26
6.3.4.4.5.2.1 Synchronization Mechanisms . 26
6.3.4.4.5.2.2 Standardized Data Exchange . 26
6.3.4.4.5.2.3 Adaptive Processing . 27
6.3.4.4.5.3 Additional Considerations . 27
6.3.4.4.5.3.1 Scalability . 27
6.3.4.4.5.3.2 Security . 27
6.3.4.4.5.3.3 Auditability . 27
6.3.4.4.5.3.4 Fault Tolerance . 27
6.3.4.4.5.3.5 Interoperability . 27
6.3.4.4.5.3.6 Performance Optimization . 28
6.3.4.4.5.3.7 Regulatory Compliance . 28
6.3.4.4.6 Testing and Verification . 28
6.4 Tokens . 28
6.4.1 Understanding Tokens . 28
6.4.2 Governance Tokens (GTs) . 28
6.4.3 Membership Tokens (MTs) . 29
6.4.4 Reward Tokens (RTs) . 29
6.4.5 Key considerations for token economics (tokenomics) . 29
7 Governance . 29
7.1 Definition of governance . 29
7.1.1 Key principles of Governance . 29
7.1.1.1 Architectural concepts pf governance . 29
7.1.1.2 Decentralized Decision-Making . 30
7.1.1.3 Token-Based Voting . 30
7.1.1.4 Proposal Mechanisms. 30
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7.1.1.4.1 The purpose of proposals . 30
7.1.1.4.2 Proposal process . 30
7.1.1.5 Smart Contract Execution . 31
7.1.1.6 Transparency and Immutability . 31
7.1.1.7 Incentive Alignment . 31
7.1.1.8 Adaptability . 31
7.1.2 Governance Models . 31
7.1.2.1 Vertical Governance. 31
7.1.2.2 Horizontal Governance . 31
7.1.2.3 Balancing Governance Models . 32
7.1.3 Purpose of Governance . 32
7.1.4 Governance Structure Objectives . 32
7.1.4.1 Primary Aim . 32
7.1.4.2 Achievement Methods and Mechanisms . 32
7.1.4.2.1 Risk Management . 32
7.1.4.2.2 Operational Control . 32
7.1.4.2.3 Stakeholder Protection . 32
7.1.4.3 Balancing Priorities . 33
7.1.4.4 Continuous Improvement . 33
7.1.5 Governance Functionality Aspects . 33
7.1.5.1 Managerial Governance . 33
7.1.5.2 Operational Governance . 33
7.1.5.3 Hybrid Governance . 33
7.1.6 Architectural elements . 33
7.1.6.1 Implementation agreements . 33
7.1.6.2 Governing Entity . 34
7.1.6.2.1 Core Responsibilities . 34
7.1.6.2.2 Additional responsibilities related to Establishment and Operation . 34
7.1.6.2.3 Types of Governing Entities . 34
7.1.6.2.4 Governance Flexibility . 35
7.1.6.2.5 Transparency and Accountability . 35
7.1.6.3 DAO governance . 35
7.1.6.3.1 Basic Principles and aspects . 35
7.1.6.3.2 DAO component abstraction . 36
7.1.6.3.3 Challenges in Consensus Abstraction . 36
7.1.7 Challenges and Considerations . 36
7.1.7.1 Voter Apathy and Participation . 36
7.1.7.1.1 Challenges . 36
7.1.7.1.2 Potential solutions . 36
7.1.7.2 Regulatory Compliance . 37
7.1.7.2.1 Challenges . 37
7.1.7.2.2 Considerations and solutions . 37
7.1.7.3 Security and Smart Contract Vulnerabilities . 37
7.1.7.3.1 Challenges . 37
7.1.7.3.2 Potential solutions . 37
7.1.7.4 Scalability of Decision-Making . 37
7.1.7.4.1 Challenges . 37
7.1.7.4.2 Potential solutions . 37
7.1.7.5 Plutocracy and Concentration of Power . 37
7.1.7.5.1 Challenges . 37
7.1.7.5.2 Potential solutions . 38
7.1.7.6 Governance Attacks and Game Theory . 38
7.1.7.6.1 Challenges . 38
7.1.7.6.2 Potential solutions . 38
7.1.7.7 Cross-ledger Governance and Interoperability . 38
7.1.7.7.1 Challenges . 38
7.1.7.7.2 Potential solutions . 38
7.2 Governance in a Single ledger DAO environment . 38
7.3 Governance in a Hybrid DAO environment . 39
7.3.1 Introduction. 39
7.3.2 Alignment of data across ledgers . 39
7.3.3 Alignment of consensus protocols across ledgers . 40
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7.3.3.1 Basic Principles . 40
7.3.3.1.1 Introduction . 40
7.3.3.1.2 Variations in Quorum and Majority Rules . 40
7.3.3.1.3 Population Differences Across Ledgers . 40
7.3.3.2 Superset ledgers . 42
7.3.3.3 Majority and Quorum in superset ledgers . 43
7.3.4 Alignment of Smart Contracts across ledgers . 43
7.3.4.1 Introduction . 43
7.3.4.2 Smart Contract Abstraction . 43
7.3.4.3 Testing and Certification . 43
7.3.4.3.1 Introduction to Testing and Certification . 43
7.3.4.3.2 Testing . 43
7.3.4.3.3 Certification . 44
7.3.4.3.4 Entities performing Testing and Certification Testing . 45
7.4 Governance through consensus . 45
7.4.1 On-ledger consensus . 45
7.4.2 Off-ledger consensus . 46
7.4.3 Multi-ledger consensus . 46
7.4.3.1 Definition . 46
7.4.3.2 Voting and majority in a multi ledger environment . 47
7.5 Governance without consensus . 47
7.5.1 Scenarios . 47
7.5.2 Delegated governance . 47
7.5.2.1 Liquid Democracy . 47
7.5.2.1.1 The need for delegates . 47
7.5.2.1.2 Key Principles . 48
7.5.2.1.3 Benefits in DAO Governance . 48
7.5.2.2 Human delegates . 48
7.5.2.3 Machines as delegates . 48
7.5.3 Expert-driven governance . 49
7.6 Automated governance . 49
7.6.1 Introduction to Automated Governance . 49
7.6.2 Recommendations . 49
7.6.2.1 The components and minimal requirements . 49
7.6.2.2 Unified data models . 49
7.6.2.3 Unified processes . 50
7.6.2.4 Unified IRPs . 50
7.6.3 Algorithmic governance . 50
7.6.4 Codebase alignment . 50
7.6.4.1 The need for alignment . 50
7.6.4.2 Standardized development practices . 51
7.6.4.3 Modular architecture . 51
7.6.4.4 Shared libraries and frameworks . 51
7.6.4.5 Cross-ledger compatibility . 51
7.6.4.6 Continuous Integration and Deployment (CI/CD) . 51
7.6.4.7 Documentation and knowledge sharing . 51
7.6.4.8 Governance of code changes . 51
7.6.4.9 Security alignment . 52
7.6.4.10 Performance optimization . 52
7.6.4.11 Interoperability testing . 52
7.7 Hybrid governance . 52
7.7.1 The basics of hybrid governance . 52
7.7.2 Evolution of hybrid governance . 52
7.7.3 Initiation . 53
7.7.4 Scale . 53
7.7.5 Self sustained . 53
7.7.6 Change management . 53
7.8 Tokens in a Hybrid environment . 53
7.8.1 The need for tokens in a hybrid environment . 53
7.8.2 Multi-token ecosystem . 54
7.8.3 Cross-ledger token compatibility . 54
7.8.4 Weighted voting . 54
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7.8.4.1 The need for weighted voting. 54
7.8.4.2 Token-Weighted Voting . 54
7.8.4.3 Quadratic Voting . 54
7.8.4.4 Reputation-Based Voting . 55
7.8.4.4.1 Description of Reputation . 55
7.8.4.4.2 Reputation Metrics . 55
7.8.4.4.3 Benefits . 55
7.8.4.4.4 Implementation Considerations . 56
7.8.5 Liquidity provision . 56
7.8.6 Smart contract interoperability . 56
7.8.7 Adaptive issuance and burning . 56
7.8.8 Governance-controlled parameters . 56
7.8.9 Privacy considerations . 57
7.8.10 Emergency measures . 57
7.8.11 Token upgradability . 57
8 Final Thoughts . 57
8.1 Key Takeaways . 57
8.2 Moving forward . 58
Annex A: List of Recommendations for DAOs. 59
History . 61

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List of tables
Table 1: Comparison between a DAO and traditional organizations .16
Table 2: Consensus scenarios .
...