There's a thought experiment that keeps me up at night, and I've been running it for a few years now.
Picture a tourism cooperative in Umbria, a small cluster of family-run agriturismi in the hills above Todi. They've agreed, informally, to cap visitor numbers, share referrals, and never undercut each other on price. It works because everyone knows everyone. Trust is maintained through proximity. The whole thing holds together not by contract but by decades of repeated human contact.
Now imagine those same families trying to codify that arrangement into something scalable. An arrangement that could survive generational turnover, or a new operator who moves in without the same informal understanding. How do you preserve the structural integrity of a trust-based system when the humans who built it start to disappear?
That question, more consequential than it first appears, is where Decentralized Autonomous Organizations enter the picture.
What a DAO Actually Is
Before getting into governance theory, it's worth being precise about the technology. Popular discourse around DAOs tends to oscillate between techno-utopianism and dismissive skepticism, and neither is particularly useful.
A DAO is an organization whose rules are encoded in smart contracts running on a blockchain. Those rules execute automatically when predetermined conditions are met, without requiring a central authority to enforce them. Members typically hold governance tokens that let them vote on proposals. Treasury management, operational decisions, revenue distribution: all of it can be structured to happen algorithmically, with human deliberation happening upstream of the code but not downstream of it.
The Ethereum Foundation's documentation on DAOs describes them as "an organization collectively owned and managed by its members," where "decisions are governed via proposals and voting" and "everything is open, and the rules are baked into the DAO via its code." That's a reasonable summary. What it doesn't capture is the governance philosophy lurking beneath the technical architecture, the idea that if you make certain rules structurally inviolable, you change what an organization fundamentally is.
That's what interests me here.
Could DAO architecture be used to build organizations where extractive behavior isn't just against policy, but mechanically impossible?
The Sustainability Removal Test, Applied to Governance
The concept of existential sustainability, as articulated in Michael Kovnick's paper "Existential Sustainability: A Structural Approach to Anti-Extractive Tourism", rests on a deceptively simple diagnostic: can the sustainability practice be removed without causing immediate business failure?
If it can be removed (a certification, a CSR program, a carbon offset scheme) it's performative. It signals values without embodying them structurally. The business would survive its removal, which means the sustainability is additive, not constitutive.
If removing the practice would cause mechanical operational collapse, you have something different. The sustainability isn't a feature of the business. It is the business.
Kovnick's longitudinal analysis of a US-based tour operator running small-group cultural trips in Europe found exactly this structure. Volume caps aren't a preference: exceeding them would destroy the quality of community relationships that make the business viable. Zero-commission policies aren't an ethical stance layered over a conventional model; they're what makes 72% local revenue retention possible, and that retention rate is what keeps partners loyal enough to sustain 100% partner retention over 20 years. The constraints and the viability are fused. You can't separate them.
Apply the same test to governance structures.
Most organizational governance is performative in precisely this sense. A board can vote to change its own charter. A cooperative can dissolve its own principles. A B-Corp certification can be abandoned when it becomes inconvenient. The rules constraining extractive behavior are rules that can be un-made by the same parties who benefit from making them.
DAO architecture raises the theoretical possibility of governance rules that aren't just policies, but structural properties of the organization itself. Rules that, once encoded and deployed, cannot be altered without triggering a cascade of consequences that make the alteration economically irrational or technically impossible.
That's the promise, anyway. Whether it holds up in practice is a different question.
The Problem DAOs Are Trying to Solve
To understand why DAO governance matters for sustainability, you have to understand the failure mode it's designed to prevent.
Call it the capture problem.
Organizations that start with community-benefit missions tend, over time, to be captured by the interests of their most powerful participants. This isn't usually malicious. It's structural. Decision-making authority concentrates in whoever controls the most resources, and those resource-holders naturally make decisions that protect and extend their holdings. The original mission drifts. Sometimes it disappears entirely.
This is exactly what Kovnick's paper documents happening in mass tourism destinations. His comparison case (a destination that went from 18 residents to 850,000 annual visitors) didn't transform because anyone decided to destroy community life. It transformed because each incremental decision made sense from the perspective of whoever held the most economic leverage at that moment. Commercial interest absorbed community interest, step by step, until the two were no longer distinguishable.
Conventional governance responses involve adding oversight layers: impact assessments, community consultation requirements, sustainability certifications, stakeholder advisory boards. These are all, in the language of the Sustainability Removal Test, removable. They sit on top of the underlying economic structure without changing it.
DAO governance, at its most ambitious, attempts to make community benefit part of the underlying economic structure. It becomes a precondition for value creation, not a constraint on value extraction.
The Harvard Business Review's coverage of blockchain governance has zeroed in on exactly this question: how decentralized systems can encode incentive structures that conventional organizations can't sustain. The mechanism isn't ideological resolve. It's that the code running on the blockchain doesn't have interests. It doesn't get tired, doesn't respond to lobbying, doesn't make exceptions for powerful members. It executes the rules as written.
That's either reassuring or terrifying, depending on how much you trust the people who wrote the rules in the first place.
Structural Fusion in Code
Let me try to make this concrete.
In Kovnick's model, structural fusion means that operator viability and community prosperity are indistinguishable. You can't have one without the other. The business constraints (250 guests per year maximum per destination, 18 guests maximum per group, 14 operating weeks per year per destination, zero commissions) aren't arbitrary. They're the load-bearing walls. Remove any of them and the structure collapses.
Could you encode this in a DAO?
In theory, yes. A DAO governing a tourism destination could encode volume caps directly into its treasury management. Revenue distribution could be structured algorithmically so that a fixed percentage (say, 72%) flows automatically to verified local partners before any funds reach the organizing entity. Commission-based arrangements could be excluded at the structural level: if the smart contract has no mechanism for commission payments, they simply can't happen.
The key insight is that this differs fundamentally from a policy prohibiting commissions. A policy can be changed by a vote. A smart contract can only be changed by deploying a new contract, a process that is visible, requires consensus, and can be structured to require supermajority approval or time-delayed implementation. The friction is architectural.
This matters more than it might sound. In my own experience running a tourism operation for over 20 years, the hardest sustainability commitments to maintain are the ones that come under pressure at exactly the moments when you're most tempted to compromise: during a slow season, when a partner retires and leaves a gap, when a larger operator offers a partnership that would require bending a rule. Structural constraints don't bend under that kind of pressure. They're not subject to the situational reasoning that makes individual exceptions seem justified.
A DAO encoding existential sustainability principles doesn't rely on the ongoing moral resolve of its founders. It relies on the ongoing operation of its code. Those are very different things.
The Governance Token Problem
Here's where I have to be honest about a serious tension.
Most existing DAOs use token-weighted voting. Governance power is proportional to token holdings. This is efficient and transparent, but it replicates the capture dynamic that DAO governance is supposed to prevent. The largest token holders have the most power to modify the rules. When those token holders are also the parties who'd benefit most from extractive arrangements, you've built a sophisticated mechanism for legitimizing capture.
This isn't hypothetical. Several high-profile DeFi DAOs have seen governance proposals that concentrated treasury funds toward early investors at the expense of the broader community: passed precisely because early investors held enough tokens to approve their own proposals. The technology didn't prevent extraction. It just made extraction faster.
The existential sustainability framework suggests an approach. You'd ask: what's the minimum governance structure that makes the sustainability properties non-removable?
That might mean certain parameters (volume caps, revenue distribution percentages, partner eligibility criteria) are encoded as immutable contract properties that no vote can change. Not because the DAO doesn't trust its members, but because the whole point is to create structural constraints that don't depend on trust at all. The architecture protects the community benefit.
This is structurally analogous to what Kovnick calls "mechanical business failure", the idea that you don't rely on the operator's ongoing resolve, you build a model where unsustainability would cause the business to stop functioning. The DAO equivalent: you don't rely on token-holder goodwill, you build a system where extractive modifications are mechanically impossible or economically irrational to execute.
The Ghost in the Machine
The title of this essay comes from philosopher Gilbert Ryle's famous critique of Cartesian dualism, the idea that there's a "ghost" (the mind, the will, the conscious self) inhabiting the "machine" (the body). Ryle argued this was a category error. The ghost and the machine are one thing described at different levels.
There's an analogous error in how we usually think about organizational sustainability.
We treat it as a ghost, a set of values and intentions that inhabit the machine of the business. The machine (the economic structure, the incentive systems, the contractual arrangements) runs on one logic. The ghost (the sustainability intention) runs on another. They coexist uneasily, and the machine usually wins when the two come into conflict.
What existential sustainability proposes, and what DAO architecture makes technically feasible for the first time, is collapsing that distinction. There is no ghost. There is no separate "sustainability intention" floating above the economic structure. The sustainability is the structure. The values are the architecture.
This is harder to achieve than it sounds, and I'm not certain we've seen it done cleanly yet. But the theoretical possibility exists in a way it wasn't before blockchain technology.
Before smart contracts, you couldn't make a rule that was self-enforcing without a central enforcement authority. Every commitment rested on someone's willingness to enforce it, which meant it rested on trust. Smart contracts change that. They don't enforce rules because someone decided to. They enforce rules because that's what the code does.
What This Means for Tourism Governance
Let me come back to tourism, because that's where these ideas have the most immediate application.
The structural failure mode in tourism is well-documented. UNESCO has tracked the degradation of heritage sites from over-tourism for decades, the pattern is consistent enough to be almost mechanical: initial authenticity attracts visitors, volume increases, commercial operators displace local ones, the authenticity that drew visitors in the first place is destroyed, and the destination either dies or transforms into a simulacrum of itself.
The 19-year longitudinal data in Kovnick's paper is striking because it demonstrates that this cycle isn't inevitable. One destination remained stable under a structurally constrained model while a comparison destination went through complete commercial transformation. Structural constraints made extraction mechanically unprofitable.
A DAO-governed destination management organization could theoretically encode those constraints. Volume limits built into revenue distribution: once a destination hits 250 guests in a calendar year, the smart contract stops processing new bookings. Revenue allocation that automatically routes a fixed percentage to verified local partners before the organizing entity receives anything. Partner eligibility criteria requiring local ownership: actual community economic stake, not just local employment.
The key word is "verified," and this is where DAO governance for tourism runs into practical complexity.
How do you verify that a partner is locally owned? How do you verify that revenue is flowing to the people the contract says it's flowing to? Blockchain transactions are transparent, but the connection between on-chain data and real-world economic relationships requires off-chain verification. Off-chain verification requires trust. Or something that functions like it.
This problem isn't fully solved. What does seem possible is that DAO architecture can dramatically reduce the surface area that requires trust. Instead of trusting an organization to apply its sustainability principles across all its decisions, you only need to trust the initial setup of the smart contract and the verification mechanisms for partner eligibility. Everything else executes automatically. That's a smaller trust requirement, even if it's not zero.
The Deliberation Problem
There's another tension worth naming.
One of the things that makes Kovnick's model work is the depth of human relationship it's built on. The 31% guest return rate and 100% partner retention over two decades stem from specific human connections that developed over years of repeated interaction. The operator's knowledge of which family in Orvieto makes the best ceramics, which farmer in the Val d'Orcia will invite guests into a working harvest rather than a staged one... this knowledge lives in relationships, not in contracts.
DAO governance is better at encoding rules than at preserving relationships. It can mandate that 72% of revenue flows to local partners. It can't mandate that those partners feel valued, or that guests experience authentic connection rather than a contractually compliant transaction.
This is a limitation. Anyone treating DAO architecture as a complete solution to tourism's sustainability problem is making a mistake. The structural constraints matter enormously. So does the human intelligence that decides what to constrain and how.
My working hypothesis, and I want to be careful to frame it as a hypothesis, is that the most promising applications combine DAO governance for the structural layer with human governance for the relational layer. The code handles the parts that require consistency and resistance to capture. The humans handle the parts that require judgment, relationship, and contextual knowledge.
Structural fusion doesn't have to mean eliminating human judgment. It means placing certain parameters beyond the reach of human judgment that might be compromised. The humans still decide where to go, who to partner with, what the experience looks like. What they can't do is exceed the volume cap, redirect local partner revenue to themselves, or introduce commission-based arrangements. Those options have been removed from the available set.
Practical Implications for Tourism Operators and DMOs
Most of this remains theoretical. There are no well-documented cases of a DAO-governed tour operator running the kind of deep cultural tourism that Kovnick's paper documents. The DAO examples that exist are mostly in DeFi, protocol governance, and media collectives: very different operational contexts.
But the framework questions are real, and practitioners should be asking them now rather than waiting for the technology to mature in isolation from the use cases it could serve.
For a tourism operator thinking about DAO governance, the first question isn't "how do we set up a DAO?" It's "which of our sustainability commitments are currently removable, and which ones would we want to make structurally non-removable?"
That diagnostic exercise is valuable independent of whether you ever implement DAO architecture. It forces you to distinguish between the commitments that are constitutive of your model and the ones that are additive to it. If you can remove it without the model failing, it's a preference, not a structure.
For destination management organizations, the stakes are higher. DMOs have both commercial operators and community interests to serve, and the capture problem is acute: commercial operators have concentrated interests and organized voices, while communities have diffuse interests and often don't participate actively in governance until damage is already done. A DAO architecture encoding community benefit floors (minimum local revenue retention percentages, maximum visitor volume thresholds) into the governance structure itself could prevent the gradual drift that turns well-intentioned DMOs into de facto chambers of commerce for the largest operators.
For policymakers, the most interesting implication is at the level of certification and licensing. Current sustainable tourism certifications are performative by definition; they certify that an operator meets certain standards at a point in time, but don't make unsustainability mechanically impossible. A regulatory framework requiring certain structural properties (encoded in smart contracts, auditable on-chain) rather than just certified practices would represent a shift from performative to existential sustainability at the policy level.
That's not coming soon. But the conceptual groundwork is being laid right now, and the people who understand both the governance technology and the tourism economics well enough to contribute to that conversation are in short supply.
The Honest Limits
I've been making a case for DAO governance as a mechanism for existential sustainability, but I want to step back and name what I don't know.
Whether the relational depth that makes models like the one Kovnick documents actually work can survive algorithmic governance at the structural layer is unclear. The 18% net margins and the 72% local retention rate are impressive, but they're products of a specific human intelligence applied over 20 years in places: Umbria, Tuscany, the hills above Orvieto. Whether that intelligence could be partially encoded and partially preserved alongside DAO governance is an empirical question, and we don't have good data on it yet.
Whether the governance token problem can be cleanly solved for tourism applications is also unclear. Token-weighted voting tends to replicate existing power distributions. Alternative models (reputation-weighted voting, quadratic voting, non-transferable tokens) each have their own failure modes. The design space is complex, and the stakes in tourism governance are real: get it wrong and you've built an efficient machine for legitimizing extraction.
There's an uncertainty I keep circling back to. The existential sustainability framework argues that sustainability has to be structural to endure. DAO architecture makes it possible to encode structural constraints that resist capture. But the people who design those constraints still have interests and make choices. The ghost doesn't disappear; it moves upstream, into the initial design decisions. The integrity of the system still depends, ultimately, on the integrity of the people who built it.
Being clear-eyed about what the approach can and can't do matters here.
The Deeper Question
What draws me to the intersection of DAO governance and existential sustainability is the underlying question about organizational integrity over time.
Most organizations start with purpose and end up elsewhere. Not because the people change entirely, but because the pressures change, the people change, and the original purpose turns out to have been held in place by individuals rather than encoded in structure. You can read this pattern in almost any organizational history, the drift from mission to maintenance to capture is so common it reads as nearly inevitable.
What existential sustainability proposes, in Kovnick's framing, is that this drift can be prevented not by better people but by better architecture. Build a system where the drift is mechanically impossible, and you don't need to rely on the ongoing heroic virtue of whoever happens to be running it.
DAO governance is the first technology that makes this kind of architectural constraint credible at scale. Not perfect. Not complete. But real in a way that wasn't available before.
Going back to those hypothetical families in their Umbrian cooperative, trying to preserve an informal arrangement that works because everyone knows everyone, the DAO version of their arrangement would lose something. The texture of the relationships, the human judgment calls, the feel of trust rather than its enforcement. But it might gain something equally important: the ability to survive beyond the generation that built it, without requiring each new generation to independently rediscover and recommit to the same values.
That trade-off is worth sitting with. The arrangements that matter most to us are usually the ones that feel most human, most dependent on individuals, relationships, moments of mutual recognition. And those are exactly the arrangements that are most fragile over time.
Whether structural architecture can preserve what human relationships create, or whether it inevitably replaces one with a simulacrum of the other, is a question nobody has answered yet.
But it's the question to be asking.
This essay draws on Michael Kovnick's paper "Existential Sustainability: A Structural Approach to Anti-Extractive Tourism," published on SSRN in 2025 and available at papers.ssrn.com/sol3/papers.cfm?abstract_id=5920202. The paper provides the theoretical framework and longitudinal data that grounds the structural analysis developed here.
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