Governance failures in blockchain ecosystems: insights from a collaborative platform collapse

Abstract

This study examines governance failures in blockchain-based ecosystems through an in-depth case study of TradeLens, a collaborative supply chain platform co-developed by IBM and Maersk. Drawing on Elinor Ostrom's theory of the commons, reconceptualized for digital infrastructures, the analysis investigates how inadequate institutional arrangements contributed to the platform's premature discontinuation. A qualitative single-case design was employed, combining ten semi-structured expert interviews with an extensive documentary analysis, informed by informal discussions that provided contextual background. Data were coded through a three-phase iterative thematic process guided by Ostrom's design principles. The analysis identifies five interrelated governance shortcomings: excessive centralization of authority, limited procedural transparency and monitoring, rigidity of rules, limited small business involvement, and communication problems. These shortcomings eroded stakeholder trust and progressively undermined the platform's institutional viability. The study develops a conceptual model of governance breakdown in blockchain ecosystems and derives theoretical propositions regarding the institutional conditions for sustaining blockchain-based digital commons. By extending Ostrom's framework to blockchain-based infrastructures, this research contributes to the literature on decentralized governance and provides empirically grounded insights into the institutional design and governance of blockchain consortia.