On March 26 the European Central Bank published a working paper concluding that governance in four major DeFi protocols is highly concentrated. Using token‑holding snapshots from November 2022 and May 2023, ECB staff examined Aave, MakerDAO, Ampleforth and Uniswap and found that, while governance tokens are held across tens of thousands of addresses, the top 100 holders control more than 80% of each protocol’s supply.
A substantial share of governance tokens appears linked to the protocols themselves or to exchanges—both centralized and decentralized. Binance was identified as the largest known centralized exchange holder across the four protocols. The paper argues these ownership patterns challenge assumptions that DAOs are inherently decentralized, raising accountability questions and complicating the job of identifying regulatory anchor points under the EU’s Markets in Crypto‑Assets Regulation (MiCA), which exempts services deemed “fully decentralised.”
The authors also studied voting behavior and reported a similar concentration of voting power, driven in large part by delegated voting. In Ampleforth, the top 20 voters control 96% of delegated voting power; in MakerDAO, the top 10 control 66% of delegated votes; and in Uniswap, the top 18 account for 52% of delegated voting power. About one‑third of the most powerful voters could not be publicly identified. Among those that could be identified, the largest groups were individuals and Web3 companies, followed by university blockchain societies and venture firms.
Most governance proposals the team cataloged concerned risk parameters that shape a protocol’s risk profile. That focus heightens accountability concerns because on‑chain data often cannot determine whether protocol‑linked holdings belong to founders, developers, or treasuries, or whether exchange wallets are voting for the exchange itself or on behalf of customers.
The paper notes methodological caveats and acknowledges data limitations that prevent it from capturing the full scope of DeFi. The authors stress the report expresses staff views rather than official ECB policy. Still, they warn that the difficulty of reliably identifying who controls major protocols complicates use of standard regulatory entry points—governance token holders, developers or exchanges—and that the most relevant anchor may vary by protocol and require non‑public information.
These findings echo earlier concerns from the Financial Stability Board and others that DeFi’s disintermediation can conceal new forms of concentration and governance risk similar to, or amplifying, those seen in traditional finance.
Cointelegraph contacted Aave, Uniswap, MakerDAO and Ampleforth for comment; no responses were received by publication.