The DAO model is changing and impacting most of the largest organizations. Governance is reaching its limits, with some protocols returning to partial centralization.
DAO platforms are evolving in 2026 as some have reached the capacity for governance. Others have abandoned the model entirely, citing inertia and the need for emergency decision-making powers.
Based on the latest estimates, DAO has total liquidity of $13.6 billion for more than 50,845 organizations. The money is largely tied up in the largest DAO. Governance tokens were still very active and recently expanded their value to over $31 billion.
Of the 11.8 million DAO token holders, only about 3.3 million are active voters. Active voice share may vary between protocols and communities. The DAO model has proven resilient and has led to continued governance, although some decisions have been controversial over the years. The biggest concern with DAO is the ability of whales to take over the voting process and push through decisions.
As a cryptopolite reportedOptimism DAO was the latest to divide its community over a decision to buy back OP tokens.
DAO shifted to partially centralized governance
The past year has been dynamic for some projects that used a DAO structure as part of their development. Based on DAO analysis by one of the active voters’ organizations, the decentralized administration had reached its maximum capacity.
As a result, several large-scale DAOs have halted their voting processes in whole or in part. Arbitrum consolidated all DAO activities into its new OpCo structure. Jupiter has paused governance for six months to reassess upgrades and rebuild the process and incentives. Uniswap also concentrated operational authority in the DUNI framework.
Gnosis introduced hard forks with limited community input, while Scroll moved to a CEO-led structure.
Most DAOs associated with a working protocol have noted that their governance process is not scalable and voting is often slow or causes conflict. Not all voters understood the technical nuance, and some proposals caused panic. As a result, governance shifted to specialized groups aware of the context, while the broader community shifted to oversight.
Participation in DAO decreased in 2025
Governance also declined in 2025 as participation reached a new low. The lack of incentives and airdrops meant that some DAOs could not find enough voters. Others saw the vote being taken over by whales to bring about a specific outcome. Lido Finance used a dual management style and saw an increase in involvement.
Although Uniswap and Arbitrum had the highest DAO participation, their communities still declined over the past year.
As a result, most projects switched to small, focused groups with less frequent board calls. Token burns and rate changes were the main issues in 2025, tied to profit sharing and token support.
DAO ownership is still a legal gray area, despite proposals for DAO LLC registration formats in some jurisdictions. DAOs exist in a gray zone, leading to uncertainty as to who owns the protocol, the brand, or the right to payouts, as in the case of Aave DAO versus Aave Labs.
DAO tokens can also transition from pure governance to a form of ownership or revenue sharing, as token holders can demand some form of compensation.