DAO governance structures can be broadly classified into hierarchical and flat role management systems. The choice between these approaches impacts decision-making speed, decentralization, and operational efficiency.
Hierarchical Role Management
A hierarchical structure assigns different levels of authority to DAO participants.
Common Hierarchical Models
- Core Team & Delegation – A core team oversees decisions but delegates tasks to working groups.
- Role-Based Access Control (RBAC) – Different roles (e.g., admin, member, proposer) have predefined permissions.
- Multi-Tier Voting – Some members have greater voting weight or veto power.
Advantages
- Efficiency – Faster decision-making due to clear leadership.
- Security – Reduces risks of governance attacks or chaotic decision-making.
- Accountability – Clear responsibilities prevent governance stagnation.
Challenges
- Centralization Risks – A hierarchical model may contradict decentralization goals.
- Reduced Participation – Members may feel excluded from meaningful governance.
- Power Imbalance – Certain roles may dominate decision-making.
Example: Compound’s Governance Hierarchy
- Governance Token Holders vote on proposals.
- Delegates represent token holders in decision-making.
- Multisig Admins handle emergency protocol upgrades.
Flat Role Management
A flat governance structure gives equal participation rights to all members.
Common Flat Models
- One-Person-One-Vote – All members have equal voting power.
- Direct Democracy – Proposals are decided by simple majority votes.
- Fluid Roles – Members self-assign tasks instead of fixed roles.
Advantages
- Decentralization – No single entity has disproportionate power.
- Inclusivity – All members have a say in governance.
- Flexibility – Roles evolve based on community needs.
Challenges
- Decision-Making Bottlenecks – Large-scale participation can slow processes.
- Coordination Issues – Lack of structured roles may cause inefficiencies.
- Governance Fatigue – Active participation from all members may not be sustainable.
Example: Nouns DAO’s Flat Governance
- No leadership hierarchy.
- Every Nouns NFT holder has equal voting rights.
- Proposals are community-driven, with no central team.
Comparing Hierarchical and Flat Models
| Feature | Hierarchical Model | Flat Model |
|---|---|---|
| Decentralization | Lower | Higher |
| Efficiency | Higher | Lower |
| Security | Higher | Lower |
| Transparency | Moderate | Higher |
| Scalability | Higher | Can be challenging |
A DAO’s governance design should reflect its core mission:
- If efficiency and security are priorities → Consider a hierarchical model.
- If decentralization and inclusivity matter most → A flat model may be better.
Hybrid Approaches: Best of Both Worlds?
Many DAOs adopt hybrid governance models that blend hierarchical and flat elements:
- Delegated Governance – Members elect representatives, balancing decentralization with efficiency (e.g., Compound, Uniswap).
- Permissioned Voting – Some votes require expert approval before execution (e.g., Gitcoin’s Steward Program).
- SubDAOs for Specialization – A core DAO oversees independent SubDAOs handling specific functions.
Example: MakerDAO’s Hybrid Governance
- Token Holders vote on key decisions.
- Delegates specialize in risk analysis and protocol updates.
- SubDAOs manage Maker’s real-world asset strategies.
Final Thoughts
DAOs must carefully design their role management structure based on their goals, size, and governance philosophy. A well-balanced hybrid model often provides the best mix of decentralization, efficiency, and security.