We propose DAO-enabled decentralized physical AI (DePAI), a democratic architecture for coordinating humans and autonomous machines in the operation and governance of physical-digital systems. We (1) synthesize foundations in blockchains, decentralized autonomous organizations (DAOs), and cryptoeconomics; (2) connect DAO design with digital-democracy research on deliberation and voting, showing how each can advance the other; (3) position DAO-governed decentralized physical infrastructure networks (DePIN) within a vertically integrated stack that links energy and sensing to connectivity, storage/compute, models, and robots; (4) show how these elements specify workflows that couple machine execution with human oversight, enabling enhanced self-organization of techno-socio-economic systems, which we call DePAI; and (5) analyze risks, including security, centralization, incentive failure, legal exposure, and the crowding-out of intrinsic motivation, and argue for value-sensitive design and continuously adaptive governance. DePAI offers a path to scalable, resilient self-organization that integrates physical infrastructure, AI, and community ownership under transparent rules, on-chain incentives, and permissionless participation, aiming to preserve human autonomy.
@article{arxiv.2605.04522,
title = {DAO-enabled decentralized physical AI: A new paradigm for human-machine collaboration},
author = {Mark C. Ballandies and Florian Spychiger and Uwe Serdült and Claudio J. Tessone},
journal= {arXiv preprint arXiv:2605.04522},
year = {2026}
}