DAO Governance for Regenerative Coordination: Hypha's Evolution from DAO to DHO to DAO 3.0

Kate Bennett^*

• Institute for Sustainable Futures, University of Technology Sydney, Sydney, Australia

Decentralized Autonomous Organizations (DAOs) – digital organizations governed by code and community – promise new paradigms of governance, yet many have reproduced the same power asymmetries, exclusionary participation models, and inefficiencies seen in traditional systems. This paper explores how DAO governance systems might evolve to support fair, inclusive, and regenerative capital flows across distributed ecosystems, particularly in contexts where traditional coordination infrastructure is limited, such as low-income and emerging markets. Using a qualitative case study of Hypha – an ecosystem that has progressed from classic DAO to Decentralized Human Organization (DHO) and now to what is termed a DAO 3.0 model – we examine how governance must move beyond code and tokenomics toward adaptive, human-centered coordination. Data from in-depth interviews and document analysis is interpreted through a People–Process–Technology (PPT) lens, surfacing a new taxonomy of DAO governance models that traces the limitations of early token-weighted “DAO 1.0” systems through protocol-optimized “DAO 2.0” and into the modular, relational, and context-adaptive structures of “DAO 3.0”. Findings highlight Hypha’s innovative mechanisms for modular multi-layer voting, “leadership without control” protocols, real-time capital flows, and trust-based safeguards, addressing fairness failures in previous DAO designs. We position Hypha as a prototype for regenerative coordination infrastructure, where governance operates as a living system responsive to human complexity, local context, and ecosystem interdependence. This study expands DAO governance theory by clarifying conceptual boundaries, systematically engaging with recent DAO literature, and offering practical guidance for policymakers, developers, and capital providers seeking to design equitable, regenerative governance and coordination systems.