eGov-DAO: a Better Government using Blockchain
based Decentralized Autonomous Organization
Nour Diallo, Weidong Shi, Lei Xu, Zhimin Gao, Lin Chen, Yang Lu,
Nolan Shah, Larry Carranco, Ton-Chanh Le, Abraham Bez Surez, Glenn Turner
firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org,
email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org
Computer Science Department, University of Houston, Houston, Texas, 77004
Abstract—E-government system has greatly improved the ef-
ﬁciency and transparency of daily operations of a government.
However, most of existing e-government services are provided in
a centralized manner and heavily rely on human individuals to
control. The highly centralized IT infrastructure is more vulner-
able to outside attacks. Also, it is relatively easy to compromise
the data integrity by inside rogue users. Furthermore, relying
on individuals to monitor and control some of the working ﬂows
makes the system error-prone and leaves room for corruption.
To address these challenges, we propose to use the blockchain
technology and decentralized autonomous organization (DAO) to
improve the e-government system. The blockchain-based DAO
system works in a fully decentralized way and is immune to
both outside and inside attacks. At the same time, operations
of such system is only controlled by pre-deﬁned rules; thus, the
uncertainty and errors caused by human processes are greatly
reduced. We provide a concrete use case to demonstrate the usage
of DAO e-government and evaluate its effectiveness.
Index Terms—blockchain, DAO, e-government, transparency,
Nowadays, most countries in the world have been providing
e-services, in which the governmental public services are
implemented by information and communication technologies,
to serve its citizens better. Initially, developing an e-service
may be challenging, due to the complexity of government
policies or the disinterest of its citizens in new technologies.
However, there are still opportunities to attract more interest
and collaboration for the e-governance by providing a secure,
rigorous, autonomous, and transparent digital system for its
services. Such system e.g voting registration, driver licence
processing, usually improves the government’s productivity
and efﬁciency on collecting, securing, and sharing information.
Therefore, it will be more likely to be received by the
citizens because of its speed and transparency. For instance,
the digitalization of government’s services helps to replace
costly in-person or postal communication by the use of mobile
phones and emails.
However, despite numerous efforts in improving the gov-
ernment system e.g voting system, it is still not sufﬁciently
secure and transparent. The system is usually built on a
highly centralized IT infrastructure, which is more vulnerable
to outside attacks. In addition, the system is heavily con-
trolled by human individuals, which makes it error-prone and
leaves room for corruption. For example, inside rogue users
can easily compromise the data integrity of the system. In
this paper, we address these challenges of the e-government
system by leveraging the emerging decentralized blockchain
technology  to bring security, immutability, reliability, and
transparency to the system. While the blockchain technology
can be applied to a wide range of government services,
this paper focuses on utilizing a blockchain feature called
Distributed Autonomous Organization (DAO) for a concrete
use case of the government contracting service .
Government contracting is a service that allocates public
contracts to given vendors. The allocation process is inefﬁcient
since it requires multiple inter-agency interaction and involves
many human labors . In order to provide a simple and
convenient interface, the government allocates both human and
ﬁnancial resources, but it results in a minimal transparency
in governance. In this scenario, blockchain technology would
increase transparency and trust, reduce costs, and simplify the
The blockchain framework introduced in this paper is generic
and can be apply to any policy for government contracting. In
this paper, we consider the policy of the U.S. Small Business
Administration as a case study . First, we describe the
general application of blockchain for the U.S contracting and
introduce several regulations of allocating contracts required
by the U.S. Small Business Administration policies. Next,
we implement a DAO framework which summarizes these
requirements to regulate the allocation process. Moreover, the
framework also deﬁnes the parties of the system and their
activities, and models the main process of contract selection
following the policies. Finally, we provide a set of enforcement
rules to validate the process.
The remainder of the paper is organized as follows: In
Section II we brieﬂy introduce the background technology
including blockchain, smart contract, and DAO. Section III
describes the detailed design of the government DAO archi-
tecture. In Section IV we analyze and evaluate the proposed
solution. We conclude the paper in Section V.
II. BACKGROU ND
In this section, we brieﬂy review the background of
A. Blockchain and Smart Contract
A blockchain, or a distributed ledger, is a system involving
multiple participants who achieve consensus over a data set
and maintain the data locally. Blockchain systems are devel-
oped under different trust models with different consensus
protocols, e.g., proof-of-work  and proof-of-stake . A
permissioned block chain usually has an identity manage-
ment mechanism to control who can participate the block
construction. Authorized users can run different Byzantine
fault tolerant protocol to determine whether a block should
be accepted and added to the block chain. In this paper, we
only consider public block chain constructed using proof-of-
work as it has received intensive studies.
The idea of a smart contract was ﬁrst introduced by Szabo
, which is described in Deﬁnition 1.
Deﬁnition 1: A smart contract is a set of promises, speciﬁed
in a digital form, including protocols within which the parties
perform on these promises .
Block chain provides an ideal platform for smart contracts
to be executed in a decentralized way. Roughly speaking, a
smart contract is a piece of program that consists of a set of
rules and corresponding operations of related accounts. On a
high level, the life cycle of a smart contract in a public block
chain system can be summarized as follows:
1) Creation. Users involved in the contract work together
to build a smart contract and use digital signatures to
guarantee its authenticity. The smart contract is then
submitted to the system.
2) Acceptance. Users who have received the smart contract
ﬁrst check its validity and then do mining to include it
in a new block. The new block is then broadcast to the
3) Execution. Users in the system who have accepted a
new block containing the smart contract will execute
it locally according to its instructions, and obtain the
result. Users then do mining to build a new block to
hold the result and broadcast it to the system.
4) Result conﬁrmation. Users who have received a block
containing the result of the smart contract will verify its
correctness to determine whether to accept it. In most
cases, the veriﬁcation is done by re-computing the smart
contract and comparing the result with the one that is
B. Decentralized Autonomous Organization
The concept of blockchain based smart contract can be fur-
ther extended to Distributed Autonomous Organization (DAO).
A DAO functions with a set computer programs, in this case
smart contracts, which deﬁne in advance the rules governing
an organization . Like an organization, a DAO behaves with
objectives and expectations to achieve a set of goals. In theory,
a DAO can be set for any reasons or goals .
Usually, a traditional organization is owned by an individ-
ual or stakeholders and registered in a centralized system,
e.g. government. This type of organization is managed in a
hierarchical structures. Directors in the organization decide
the future actions and the remaining members just follow the
decision. For example, in a company, the board has the power
to decide how to deal with the funds and to set a goal; other
employees will be assigned with tasks to complete the goal.
In contrast, all participants in a DAO have the same rights to
make decisions. It means that no one has special privileges in
operating the organization.
Autonomy is the major feature of DAO. A DAO requires
an automated program to ensure that the decisions can be
executed without any manual intervention . For a smart
contract, if a set of events in the contract is triggered, it
will be executed automatically by the decentralized system.
For instance, if a contractor receives enough votes from the
members of DAO, funds will be released for him or her.
Typically, DAO also involves the following features:
•DAO comprises all data/requirements (resources) needed
to complete a task/process.
•DAO can enforce partnerships between compa-
nies/organizations without any physical interaction
because a smart contract runs automatically on nodes in
the network and does not require any human interaction.
•DAO can be set up as easy as creating a company. It is a
global organization open to anyone, regulated by a smart
contract and operated using computer codes/coding.
•DAO will transform organizational processes and create
a new platform (distributed system) that impacts our
III. BLOCKCHAIN BASED GOVERNMENT DAO
In this section, we adopt smart contracts and DAO to
build an automated blockchain based e-government system,
or government-DAO (eGov-DAO) for short. We ﬁrst describe
the high level architecture of the government-DAO and then
provide its detailed design.
A. High Level Architecture
Participants of the eGov-DAO is divided into two groups,
the DAO maintainer and the users, as depicted in Fig. 1.
•Blockchain maintainer. As we consider public blockchain
constructed using proof-of-work, any one with com-
putation/storage resources can connect to the system
and contribute to block construction . Some of the
blockchain maintainers may not be honest, e.g., they
could try to alter or remove transaction data stored in
the blockchain system or provide wrong results of a
smart contract. However, we assume that the majority of
them are honest maintainers so that those malicious ones
cannot compromise the blockchain infrastructure;
Transport Company Material Supplier
Fig. 1. Two types of participants in the eGov-DAO system: the blockchain
maintainers and users including government agencies, auditors, and other
vendors that work for the government. The identity management component
supports identity control and does not participate in daily operations of the
Fig. 2. An overview of the work ﬂow of the government-DAO.
•User: The eGov-DAO has a variety of users, from
government agencies who manage government projects,
project auditors, to all types of vendors. They can submit
different types of transaction records to the eGov-DAO,
which will be veriﬁed by blockchain maintainers before
accepted to be included in the blockchain. According to
the rules deﬁned in the eGov-DAO, an authority party
may need to approve one transaction before it can be
Fig. 2 gives an overview on the work ﬂow of the proposed
government-DAO. For a government contract, the eGov-DAO
tracks each step of it during its whole life cycle.
B. Detailed Design
There are various forms of government contracts. For ex-
ample, ﬁxed price where vendor can compete and go through
a bidding system, and cost reimbursement in which the price
is negotiable. All of them can be implemented using the DAO
concept. Initially, the general requirements of the contract are
implemented in smart contract, which will be used as the basic
rules to control execution of the contract.
All users, e.g., vendor, company, and regulators, are gov-
erned under these initial requirements. According to the US
Department of Defense, there are at least eleven steps to
cont ract is suer's signat ure
a new co ntract
Bidd ing keep biddi ng unt il selec ted
iss uer's can celatio n
no sat isfied const ractor
cont ractor 's sig nature
execut ion res ult
Conver t to sm art
Fig. 3. The life cycle of a government-DAO. Usually, an eGov-DAO requires
contract issuers, regulators, contractors, executors, and auditors to participate
acquire a government contract. The steps can be grouped into
four categories: contract preparation and submission, bidding
and selection, contract execution monitoring, and auditing. At
each stages of the execution, the system checks and validates
that all the parties meet the requirements before moving to the
next stage of the execution.
The eGov-DAO automatically executes all the transactions
and the results are available to the public including all users.
The system ﬁrst veriﬁes that contract preparation is submitted,
validates and adds it to the blockchain, then moves to the bid-
ding step. Fig. 3 demonstrates the life cycle of a government
contract in the eGov-DAO system.
User registration. Unlike the blockchain maintainer, to be-
come a user of the eGov-DAO, an entity has to go through
a registration procedure before he/she can participate in. For
example, a D-U-N-S Number, like the social security number
for a company, provides a unique form of identiﬁcation and
records all the information about the company . This
number can help others like lender and business partner to have
an idea about the company. When the entity registers, it has
to provide such information to an authority and the authority
will issue a certiﬁcate to it as its identity in the eGov-DAO.
In most cases, the certiﬁcate is a public/private key pair where
the public key is embedded in a digital certiﬁcate , .
The rules to use and manage the certiﬁcate are also embedded
in a smart contract, and no human needs to be involved.
Contract preparation and submission. A traditional govern-
ment contract needs to be converted to the form of a smart
contract, i.e., all clauses in the contract need to be written in
the language supported by the eGov-DAO . Algorithm 1
gives an example of an eGov-DAO contract. After generation
of the contract, the contract issuer digitally signs the contract
and shares it with other regulators. Each regulator or actor
checks whether the contract is consistent with related rules
and generates a digital signature using his/her private key.
After all these procedures are ﬁnished, the contract and related
signatures are sent to the eGov-DAO and available to the
Note that contract contents include both detailed require-
ments/description of the project and contractor selection cri-
teria. The contract also includes a set of milestones where the
contractor should submit information to the eGov-DAO. All
the information is encoded into corresponding smart contracts.
Bidding and selection. After the contract is conﬁrmed on the
blockchain of the eGov-DAO, the bidding procedure starts.
Fig. 4 shows a sequential diagram of this procedure. More
speciﬁcally, all contractors who are interested can prepare a
proposal, generate a signature of the proposal, and submit
to the eGov-DAO. Each submitted bidding will be checked
by participants of the eGov-DAO, and only those that satisfy
the pre-deﬁned criteria will be accepted and recorded in the
blockchain. Then participants run the procedure embedded
in the smart contract to select the winning contractor .
Information of the selected contractor is also embedded in
a block and stored on the blockchain. When this block is
conﬁrmed, the selected contractor should follow the require-
ments/description of the project.
Note that the bidding information usually needs to be kept
in secret before the selection procedure. As the blockchain
is publicly available, a protection mechanism is required. A
cryptographic commitment scheme can be used to address this
problem. The scheme allows one to commit a chosen statement
while keeping it hidden from others, with the ability to reveal
the committed statement later . For the eGov-DAO, each
contractor puts his/her bidding information into a commitment
and submits to the blockchain, which prevents others from
learning the bidding. At the selection step, each contractor can
open his/her commitment and the binding property prevents
one from modifying the committed statement.
Algorithm 1 provides an example pseudo code for the smart
contract to manage bidding procedure.
Monitoring contract execution. When the selected contractor
meets one milestone deﬁned in the contractor, he/she submits
required information of the milestone to the eGov-DAO. A
third party such as the project supervisor can also provide
information for the milestone. Participants of the eGov-DAO
checks whether submitted information meets the requirements
deﬁned in the contract to determine if the contractor can
proceed to the next step. The decision is also recorded in a
block and appended to the blockchain .
From Fig. 5, we learn that smart contracts are executed by
the available nodes in the network, and the execution result
will be submitted to the blockchain for others to verify. Once
the system reaches consensus on the result, it will be added
to the blockchain of which existing participants preserve a
Auditing. Because of the immutability property of blockchain,
the eGov-DAO provides a good support for auditing. All
contract related information, e.g., project requirements, re-
ceived bidding information, and contract execution/inspection
records, is stored on the blockchain and difﬁcult to modify. An
auditor can easily trace back each step to see whether there is
Algorithm 1 A smart contract manages bidding in the
2: chairperson:address ←address of chairperson
3: voters:array ←list of voters
4: proposals:array ←list of proposals
6: function VOTE(proposal i,voter a)
7: if voter a.voted then return false
8: if proposal i ≥proposals.length then return false
9: voter a.voted ←true
10: voter a.vote ←proposal i
11: proposals[proposal i].voteCount ←
voter a.weight return true
13: function WINNINGPROP OS AL
14: win c ←0
15: for prop ←0,prop < proposals.length,prop++ do
16: if proposals[prop].voteCount > win c then
17: win c ←proposals[prop].voteCount
18: winningP r oposal ←prop
return winningP roposal
21: The goal of function “winningProposal” is to ﬁnd out a
proposal which receives maximum votes.
IV. ANA LYSI S AN D EVALUATION
In this section, we analyze and evaluate the proposed
government-DAO from security and performance perspectives.
A. Security of the Government-DAO
There two major types of threats to the government-DAO
•Data integrity. Data is the foundation for all functions
provided by the eGov-DAO. If an attacker can alter/delete
existing data or insert new data to the historical data, it
may cause serious consequences. The blockchain struc-
ture can avoid all these risks to protect the integrity
of the data. In order to compromise data stored in the
blockchain, an attacker has to compete with all the honest
users who maintain the blockchain system on producing
new blocks. It is a big challenge for both proof-of-work
and proof-of-stake, and the probability of success is very
low , .
•Rule integrity. In the eGov-DAO system, rules are logics
embedded in smart contracts. Rule integrity means that
an attacker cannot inﬂuence the execution of a smart
contract to get preferred results. Rules (smart contracts)
are embedded in blocks before they are executed so
the attacker cannot modify them directly. According to
the smart contract execution model, everyone will run a
contract to see the results rather than simply accepting
one. Therefore, as long as the majority of users of the
CONTRACTOR BLOCK CHAIN
[avai lable] new
Fig. 4. Multiple contractors start to bid for the contract and the selected one will be notiﬁed by DAO and blockchain.
Fig. 5. Smart contract execution can be triggered by an event internally or
externally; the execution of a contract would produce a result on which all
system are honest, an attacker cannot compromise the
rule integrity by providing a wrong execution result as it
will be rejected by the majority.
Another potential security concern is data conﬁdentiality
stored on the blockchain that the eGov-DAO relies on. Because
we are using public blockchain, everyone can access data
stored there. In most cases this is not a problem because the
government has to make such information public eventually.
In case the data is sensitive, all parties involved can negotiate
a data protection key and encrypt everything before submiting
to the eGov-DAO. This mechanism can protect the data from
unauthorized accesses but also reduces the transparency of the
government. Therefore, data that needs to be protected should
be deﬁned in the eGov-DAO in advance to make sure that this
function will not be abused.
B. Performance of the Government-DAO
Modern governments are becoming increasingly complex
and the eGov-DAO has to handle a large amount of workload.
A good thing is that most of these works do not have a high
requirement on latency. For example, in the process of bidding
and selection, a latency in several days is still acceptable to
have the ﬁnal result. The performance of the eGov-DAO is
heavily affected by the underlying blockchain infrastructure,
and various methods have been developed to improve its
throughput, latency, and scalability , , . All these
techniques can be applied to improve the performance of the
eGov-DAO so that it will have the capability to process an
increasing amount of work.
Today, e-government services, e.g., the contracting service,
do not have a fully automated and efﬁcient system that can
both integrate all the participants and provide transparency.
In this paper, we propose the blockchain-based government-
DAO (eGov-DAO), which is the ﬁrst system allowing real-
time monitoring and analysis of an e-government service. The
system provides transparency, accountability, immutability,
and more importantly, a better national resource management
to the service. This system reserves all records for auditing,
thus limiting litigation between parties involved and increasing
the speed of allocation and execution of contracts. Our design
makes the system user-friendly, which requires minimum
training for the users. Finally, we believe that the decentralize
nature of the eGov-DAO makes it attractive to both public
users and business community, given their huge amount of
interest in blockchain technology recently.
For the last couple of years, both governmental and business
services have been hacked several times, from ransomwares to
denial-of-service attacks. The blockchain-based government-
DAO deﬁnitely solves these security problems while still
reduces costs of building and maintaining complex IT infras-
tructures. This solution helps a government to save unlimited
amount of resources, manage more efﬁciently government
business, and reduce the risk of giving contracts to companies
that lack the capacity to fulﬁll them by implementing a
transparent and secure e-government system with a minimum
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