Decentralized autonomous organizations (DAOs) are entities without central leadership that operate based on a set of decision-making rules encoded into smart contracts using blockchain technology. In this study, we develop a theoretical model of DAO governance featuring strategic token trading under token-based voting to investigate potential conflicts of interest between a large participant (a “whale”) and many small participants. Our results show that ownership concentration is negatively related to platform growth, but platform size, token illiquidity, and long-term incentives can mitigate the negative effects. We confirm these predictions using novel voting data on over 200 DAOs between 2020 and 2022.