Decentralized Autonomous Organizations (DAOs) have emerged as a radical reimagining of organizational structure, promising to replace centralized control with transparent, token-based coordination and distributed decision-making. The launch of The DAO on Ethereum in 2016 marked the first large-scale implementation of this concept: an ambitious experiment that both coined the term and catalyzed the broader DAO movement. Despite its early pitfalls and the hard lessons it left in its wake (Jentzsch, 2016), the project ignited a wave of innovation in decentralized governance infrastructure. Yet as the ecosystem has expanded, many projects have struggled to deliver on their democratic ideals. Rather than achieving broad-based participation, most DAOs have replicated familiar patterns of exclusion: technocratic interfaces, plutocratic voting mechanisms, and rigid governance protocols that often concentrate rather than distribute power.

These limitations are particularly acute in global development contexts, especially in low-income and emerging markets, where financial exclusion, institutional distrust, and infrastructure gaps already challenge traditional models. Poorly designed DAOs risk reinforcing digital colonialism rather than enabling inclusive governance (Birhane, 2020; Hassan and De Filippi, 2021). At the same time, as the field of regenerative finance – that is, finance grounded in living systems principles and designed to support the evolutionary health of people and planet (Bennett 2025a, Bennett 2025b; Fullerton 2015, Fullerton 2017; Mang and Haggard, 2016) – continues to evolve, new questions are emerging around how decentralized systems, when thoughtfully designed, might support more participatory, place-based approaches to coordination, particularly in under-resourced environments.

This study is motivated by the need to understand how DAOs can overcome well-documented governance challenges and support participatory, regenerative development, particularly in resource-constrained environments. Hypha (https://hypha.earth) – the focus case for this study–is a decentralized coordination and governance platform designed to enable purpose-driven communities to manage shared resources, mobilize capital, and coordinate collective action. While many DAO platforms (e.g., Aragon, Colony, DAOstack) are experimenting with governance innovations, Hypha was selected for this case study due to its explicit design for regenerative coordination and the author’s direct access to, and experience with, its core team and their multi-year governance evolution. Unlike other platforms, Hypha is intentionally built around regenerative principles, providing unique relevance to the research aims.

This study addresses two key research questions: Firstly, how can DAO governance structures evolve to support adaptive, inclusive, and context-specific coordination? Secondly, how might these structures enable participatory capital mobilization in support of regenerative development, especially in emerging markets?

In Hypha’s case, the first observed shift away from standard DAO structures was in their transition to a “Decentralised Human Organisation” (DHO) model, acknowledging that truly regenerative practice requires human experience–sensemaking, participation, and development–to be placed at the heart of the DAO. Building on this, Hypha transitioned to an Adaptable Organization (AO) model recognising that living systems, including human organizations, are by nature responsive, adaptive, and flexible. Governance structures must therefore accommodate phases of centralization and decentralization, collaboration and autonomy, automation and human judgment, meeting organizations where they are and supporting vitality at every stage of development. In this paper, that final AO stage is situated conceptually as DAO 3.0: a third-generation governance architecture that balances technical automation with human and ecological flourishing, maximizing regenerative potential by designing for modularity, relational trust, and systems thinking inspired by the logic of life itself.

Hypha’s contributors are globally distributed, and earlier iterations of the technology have been applied in various community-led, impact-focused initiatives. However, the platform’s development remains primarily grounded in the team’s own organizational experience, serving as a live test-bed for regenerative governance in practice. Drawing on qualitative interviews with Hypha core contributors, this paper explores how its governance system evolved in response to practical, philosophical, and technical constraints, and what this evolution reveals about the future of decentralized coordination. The analysis applies a regenerative theoretical lens with empirical data analyzed based on the People–Process–Technology (PPT) framework: a well-established approach for structuring organizational change analysis that distinguishes between human factors, institutional processes, and enabling technologies. (Leavitt, 1965; Barki et al., 2008).

In doing so, the paper contributes both conceptually and practically to the fields of DAO governance, regenerative finance, and development strategy. It reframes DAO governance as a dynamic, relational process: one that must move beyond tokenomics and automation-centric design to embrace human complexity, contextual adaptability, and the interdependence of capital, governance, and community. It positions Hypha’s DAO 3.0 model as an early prototype for regenerative coordination infrastructure, offering insight not only to blockchain developers and DAO theorists, but also to policymakers, capital providers, and local actors seeking to design more just and inclusive systems.

Governance, broadly, refers to the frameworks and mechanisms through which collective decision-making and resource allocation are coordinated within organizations (Puranam et al., 2014). With the rise of blockchain technology, new models of decentralized governance have emerged that reimagine authority, control, and trust (Febrero and Pereira, 2022; Lumineau et al., 2021). Blockchain-based platforms provide programmable, transparent infrastructures for collaborative organization, but also introduce new boundary conditions and design trade-offs (Pereira et al., 2019). DAOs represent the most fully realized expression of this paradigm, enacting organizational forms governed by both code and community, but their real-world impact depends on overcoming well-known governance challenges.

The literature on DAOs is expanding rapidly, reflecting a field in flux as both technical architectures and governance logics evolve. To date, most research has focused on technical platform features (Baninemeh et al., 2023), protocol design, or early taxonomies of DAO forms and operations (Bonnet and Teuteberg, 2024; Qin et al., 2023; Valiente et al., 2022). These studies have advanced the state of knowledge by mapping the technical, social, and architectural dimensions of DAOs and providing decision frameworks for platform selection and deployment. However, a common limitation is their tendency to treat DAO governance as static, primarily technological, or abstracted from the lived realities of participants and communities (Tan et al., 2023). Few studies address how DAOs actually evolve in practice–that is, how governance structures adapt over time in response to human, social, and ecological complexity, or how coordination can be operationalized beyond technical code.

Despite rapid technical progress, most DAO research and practice to date remains heavily focused on protocol design, voting mechanisms, and economic incentives, with relatively limited attention paid to the lived, human experience of organizational participation, adaptive governance, and the social complexity that emerges at scale (Tan et al., 2023).

This paper addresses this gap by foregrounding the organizational, relational, and adaptive aspects of DAO evolution, with particular focus on human-centered and regenerative coordination in real-world contexts. The following subsections first review the trajectory of DAO governance and its limitations, then present Hypha as a practical case study of lived governance and technology evolution, before contextually grounding this enquiry into DAO governance for regenerative coordination.

This paper adopts a qualitative case study methodology to explore how decentralized governance systems can evolve to support fair, inclusive, and regenerative capital flows. Hypha was selected as a critical case due to the transparently documented nature of its governance evolution, traceable through publicly accessible coordination tools, including archived discussions on Discord, comprehensive meeting recordings, and on-chain proposal and voting records that log every formal decision made within the organization. These open records document Hypha’s progression through three distinct stages of DAO governance architecture: an initial DAO model, the transition to a Decentralized Human Organization (DHO), and the implementation of a DAO 3.0 framework via the launch of Hypha V3. This case offers a unique opportunity to examine governance innovation across technical, human, and philosophical dimensions, grounded in lived practice and real-time experimentation.

To structure the analysis, this study employs the People–Process–Technology (PPT) framework: a multidimensional analytic lens first introduced by Harold Leavitt (1965) and widely adopted in digital transformation and organizational change scholarship (Chang and Chen, 2025; Lockett, 2023; Soja and Soja, 2017; Taher, 2023). PPT captures the dynamic interplay between human factors, process innovation, and technological infrastructure, and is a well-established framework for digital transformation across diverse fields—including manufacturing, education, healthcare, and tourism (Mugdh and Pilla, 2012; Sunmola et al., 2021; Taher, 2023; Wu et al., 2024). It is also frequently used to structure organizational readiness, innovation, and change management (Wu et al., 2024; Lockett, 2023).

While PPT is widely recognized in digital transformation research, most studies apply it to traditional or IT-centric contexts, with few addressing the dynamic, adaptive interactions among people, process, and technology in decentralized digital ecosystems or regenerative finance. This study extends prior PPT applications by operationalizing the framework within the context of DAO governance and regenerative organizational design. In doing so, it provides an empirical foundation for analyzing how human, processual, and technological factors co-evolve in the design and evolution of decentralized governance, addressing a noted gap in both DAO and PPT literatures.

In this case, the PPT framework is used to explore how human readiness (people), institutional logic and coordination (process), and infrastructure design (technology) converge within Hypha’s evolving governance system. This approach aligns with the broader methodological design of the author’s doctoral research, which draws on Participatory Action Design Research (PADR) principles to examine the co-development and deployment of regenerative finance infrastructure in collaboration with both local and global actors.

Primary data was collected through semi-structured interviews with three core contributors to the design, deployment, and ongoing evolution of Hypha’s platform. Participants were selected for their sustained, hands-on involvement across governance design, technical architecture, tokenomics, and organizational development. In keeping with Hypha’s highly collaborative, multi-hatted team model, each interviewee contributed insights across multiple domains, reflecting both specialized expertise and the integrated, participatory approach that characterized the V3 development process. While the small sample reflects the bounded and deeply collaborative nature of the core development team, it enabled an in-depth exploration of the platform’s internal evolution and decision-making. Interviews focused on participants’ reflections on earlier DAO iterations, the transition to DHO and DAO 3.0 models, and their assessment of Hypha’s approach to inclusion, fairness, and systemic adaptability.

At the time of data collection, Hypha V3 had not yet launched publicly; therefore, the research centers on the perspectives of those actively involved in the platform’s internal design and testing. These participants were uniquely positioned to reflect on the motivations, constraints, and philosophical evolution informing V3. As the goal was not to achieve saturation across a population but to trace the governance evolution of a single platform, the study prioritizes depth over breadth. Future research could expand this inquiry through user-focused interviews post-deployment.

Interview transcripts were analyzed using a combination of inductive thematic analysis and pattern coding, aligned to the PPT framework. A preliminary round of open coding in NVivo generated 43 unique codes. These were then reviewed for thematic coherence and grouped into three primary clusters aligned to the PPT model. An additional parent code–Contextual Barriers–was added to capture environmental and infrastructural conditions that, while external to Hypha’s governance design, significantly influence its viability and real-world impact. Coding memos were maintained to support analytic reflexivity and mitigate researcher bias. Subcodes were developed inductively through recurring participant language and reflect themes such as relational trust, dissent scaffolding, modular interoperability, and infrastructure constraints. A full coding structure is provided in Supplementary Appendix A.

Secondary data sources included Hypha’s whitepapers, tokenomics documentation, platform demos, and ecosystem communication materials, which were triangulated with the interview findings. The analysis was further contextualized with reference to DAO governance literature, regenerative design theory, and decentralized finance scholarship.

This approach aligns with established principles for rigorous case study research in information systems and software engineering (Runeson et al., 2012), emphasizing contextual depth, transparency in data collection, and analytical triangulation. This case study does not seek to generalize across DAO ecosystems but instead offers a depth-oriented analysis of one platform’s governance architecture. Its purpose is to surface the design tensions, cultural shifts, and technical adaptations involved in prototyping regenerative coordination infrastructure, and to inform broader conversations about the future of decentralized governance.

The findings are structured using a People–Process–Technology framework, enabling a layered analysis of how Hypha’s governance model has evolved across human behaviour, operational mechanisms, and technological design in response to challenges commonly observed in DAO ecosystems. Drawing on primary interviews with three core contributors–triangulated with whitepapers, platform documentation, and deployment notes–this section explores how these three dimensions intersect to produce a governance system designed to support regenerative capital flows, fairness, and adaptability in distributed ecosystems.

The findings presented in the previous section illustrate that Hypha’s governance architecture represents more than just a technical evolution–it reflects a deeper reorientation of what decentralized governance can be. In contrast to many DAOs that replicate financialized or technocratic governance structures, Hypha’s trajectory signals a transition toward regenerative governance: a model that centres human consciousness, relational trust, and system adaptability as core design principles.

This positions Hypha within a distinct category of what might be termed DAO 3.0: a new generation of decentralized governance systems that respond to the limitations of early DAO tooling by embracing complexity, diversity, and evolution. Where DAO 1.0 emphasized hard-coded rules and token-weighted decisions, and DAO 2.0 focused on protocol optimization and security, DAO 3.0 reflects a philosophical and technical shift toward governance as a living system: emergent, contextual, and co-evolving with the communities it serves.

These research findings contribute to ongoing academic and practitioner debates in three interrelated ways, which are outlined below. While this paper does not engage in a formal theoretical exposition of the terms “ecosystem” or “infrastructure,” both concepts feature prominently in the empirical findings and warrant clarification. Here, “ecosystem” refers to the relational and organizational networks in which Hypha operates, including community contributors, technology users, partner organizations, and aligned impact initiatives. “Infrastructure” refers to the integrated technological and governance tools that enable coordination and value exchange within and across those networks.

DAO governance has undergone a marked transformation since its origins in 2016. While early implementations (DAO 1.0) emphasized automation, code-based execution, and token voting, second-generation models (DAO 2.0) introduced modularity, off-chain coordination mechanisms, and optimization through stakeholder tooling. DAO 3.0 models–including Hypha’s V3 – extend this trajectory by embedding human-centered design, adaptive logic, and relational coordination into the governance stack.

Figure 1 contrasts these three generations of DAO architecture across five key governance dimensions: participation, tooling, decision logic, inclusion bias, and governance role. The framework is derived from a synthesis of DAO governance literature and extended through field-based insights from the Hypha case. While simplified for conceptual clarity, the distinctions reflect widely documented patterns across DAO ecosystems. For a literature-informed breakdown and full citation of sources supporting these distinctions, see Supplementary Appendix Table B2 in Appendix B.

This comparison highlights how DAO 3.0 reframes governance as a dynamic, living system capable of supporting regenerative capital flows across complex ecosystems. The DAO 3.0 models, as described here, integrate modular infrastructure, participatory scaffolds, and real-time capital flows to support governance as an adaptive, relational system rather than a static protocol.

This study is limited in several important respects. First, while it provides in-depth insights into the design, philosophy, and architecture of Hypha’s DAO 3.0 model, it does so prior to the platform’s full public release. As a result, the findings reflect primarily the intentions and reasoning of system designers rather than direct user experiences or adoption outcomes. Future research will be needed to assess how Hypha’s governance innovations perform in practice across diverse ecosystems and stakeholder groups.

Second, the study focuses on a single case, which naturally limits generalizability. While Hypha’s evolution offers a compelling prototype for regenerative governance, it is grounded in a specific community, context, and development trajectory. Nonetheless, the insights presented here contribute to broader conversations in DAO governance theory, regenerative finance, and decentralized coordination, and may serve as a foundation for comparative or longitudinal analyses across diverse DAO ecosystems.

Third, while Hypha’s governance infrastructure is already aligned with many of the principles necessary for deployment in low-income and emerging market contexts–such as wallet-free participation, role-based voting, and real-time capital flow–its full accessibility in these environments will depend on ongoing interface development. At the time of writing, the platform operates primarily through a web-based interface, which may pose usability barriers in mobile-first, low-bandwidth settings. However, the Hypha team has signalled a roadmap toward more inclusive access models, including mobile-responsive design, chatbot interfaces, and embedded governance modules that reduce cognitive and technical load. These developments will be critical for unlocking the platform’s full potential in under-resourced environments. Future research should explore how these interface adaptations impact participation, trust, and coalition-building in real-world development finance contexts. Without careful design and contextual grounding, even advanced DAO models risk reinscribing what Gloerich (2023) describes as “blockchain colonialism”: a system where datafication and tokenization overwrite cultural, ecological, and relational complexity with tradable abstractions.

And lastly, although DAO 3.0 models address many internal governance limitations, issues around legal status and liability remain unresolved. The absence of formal legal personhood continues to create uncertainty around member liability, contractual enforceability, and external legitimacy (Borgogno and Martino, 2024). However, the emergence of DAO-recognized legal entities in jurisdictions such as the Marshall Islands, Wyoming, and Liechtenstein reflects a growing willingness to provide legal scaffolding for decentralized coordination. Concurrently, DAO 3.0 architecture (such as Hypha’s V3) is increasingly designed to operate as a digital twin of off-chain legal entities, enabling real-world accountability while preserving the flexibility and inclusivity of on-chain governance.

This study set out to examine how DAO governance systems can evolve to support fair, inclusive, and regenerative coordination, particularly in contexts where traditional infrastructure is limited. Through a qualitative case study of Hypha and its progression from DAO to DHO to DAO 3.0, this research has surfaced critical design shifts that challenge prevailing Web3 governance paradigms and offer new possibilities for adaptive, trust-based, and context-responsive organizational models.

Theoretically, this work advances DAO scholarship by articulating and empirically grounding a new taxonomy of governance evolution. The DAO 3.0 model expressed in this study moves decisively beyond automation-first, token-voting paradigms to envision governance as a living, relational system. It demonstrates how participatory scaffolding, nested modularity, and conscious sensemaking can be operationalized to support adaptive and regenerative coordination. In doing so, the research extends the scope of DAO theory from structural and technical questions to include cultural, ethical, and ecological dimensions, addressing recent calls for more human-centered, purpose-driven, and contextually adaptive forms of decentralized governance.

Practically, the findings provide actionable insights for designers, platform developers, policymakers, and practitioners across the Web3 and development finance landscapes. The integration of real-time capital flows, flexible governance layers, and embedded trust mechanisms in Hypha’s architecture demonstrates how DAOs can move from static protocols to dynamic systems capable of supporting ecosystemic finance and coalition-based development. This points to tangible pathways for building more inclusive, resilient, and impactful digital organizations.

Importantly, this research also highlights the critical role of culture, consciousness, and care in the evolution of decentralized systems. As Hypha’s case shows, the future of DAO governance lies not just in new tools, but in a shift of mindset: from code as structure to stewardship as practice, and from coordination as control to regeneration as ethos.

While the present study is bounded by its pre-launch focus on a single platform, it lays a foundation for future research. The next phase will examine user engagement, participation, and impact as Hypha V3 is deployed in real-world settings, including an ecosystemic finance pilot for regenerative development. As the technology evolves, there will also be opportunities to evaluate how interface innovation shapes participation and trust, especially in low-income or under-resourced contexts. Hypha’s rich archive of governance records presents unique opportunities for researchers to further investigate the lived dynamics of decentralized coordination, sensemaking, and power-sharing.

Beyond the Hypha-specific use case, further research should critically examine how power, inclusion, and ethical risks–including digital colonialism and governance capture–play out in post-deployment contexts and diverse communities, ensuring that DAO systems serve to redress rather than reinforce historical inequities.

In sum, this paper contributes to an emerging movement that seeks to evolve decentralized governance from code to consciousness, from rigid structure to relational stewardship, and from extraction to regeneration. The evolution mapped here demonstrates that DAOs, when intentionally designed and continually reimagined, have the potential to become infrastructures for more just, adaptive, and regenerative collaboration, serving both people and planet in a rapidly changing world.