A Privacy-Preserving DAO Model Using NFT Authentication for the Punishment not Reward Blockchain Architecture

Abstract: \This paper presents a novel decentralized autonomous organization (DAO) model leveraging non-fungible tokens (NFTs) for advanced access control and privacy-preserving interactions within a Punishment not Reward (PnR) blockchain framework. The proposed model introduces a dual NFT architecture: Membership NFTs ((NFT_{auth})) for authentication and access control, and Interaction NFTs ((NFT_{priv})) for enabling private, encrypted interactions among participants. Governance is enforced through smart contracts that manage reputation and administer punitive measures, such as conditional identity disclosure. By prioritizing privacy, security, and deterrence over financial rewards, this model addresses key challenges in existing blockchain incentive structures, paving the way for more sustainable and decentralized governance frameworks.