Coordination Failure

Definition ∞ Coordination failure occurs when a group of individuals or entities cannot achieve a mutually beneficial outcome due to an inability to synchronize their actions. Despite individual incentives potentially aligning with a collective good, the absence of effective mechanisms for collective action prevents the desired result. This often leads to suboptimal outcomes for all participants.
Context ∞ Within decentralized autonomous organizations (DAOs) and blockchain governance, coordination failure can significantly impede progress on protocol upgrades, resource allocation, or community-driven initiatives. News reports frequently discuss how various governance models, tokenomics designs, or communication strategies aim to address these failures. The effectiveness of these mechanisms in fostering collective action is a constant subject of analysis in the digital asset space.