The European Central Bank published a working paper on March 26 that finds governance in four major DeFi protocols is highly concentrated. Using snapshots of token holdings from November 2022 and May 2023, the staff examined Aave, MakerDAO, Ampleforth and Uniswap and report that, although governance tokens are distributed across tens of thousands of addresses, the top 100 holders control more than 80% of each protocol’s supply.
A large share of governance tokens could be linked to the protocols themselves or to centralized and decentralized exchanges, with Binance the largest identified centralized exchange holder across the four protocols. The paper argues these patterns challenge the assumption that DAOs are inherently decentralized, raising questions about accountability and complicating efforts to identify regulatory anchor points under the EU’s Markets in Crypto-Assets Regulation (MiCA), which currently excludes “fully decentralised” services.
The authors also analyze who actually votes on proposals and find voting is similarly concentrated, with delegates wielding much of the power. The top 20 voters in Ampleforth control 96% of delegated voting power; the top 10 voters in MakerDAO hold 66% of delegated votes; and the top 18 in Uniswap hold 52%. Roughly one-third of top voters cannot be publicly identified; among those that can, the largest identifiable groups are individuals and Web3 companies, followed by university blockchain societies and venture firms.
The paper catalogs governance activity and finds the largest share of proposals relates to risk parameters that shape protocol risk profiles. That intensifies accountability concerns because public on‑chain data often cannot reveal whether protocol-linked holdings belong to founders, developers or treasuries, or whether exchange wallets are voting for exchanges’ own positions or on behalf of customers.
Authors note methodological caveats and that the study does not capture the full scope of DeFi due to data limits. They stress the paper reflects their views, not official ECB policy, but warn that the difficulty of reliably identifying who controls major protocols makes it harder to use standard regulatory entry points—governance token holders, developers or exchanges—and that the relevant anchor may differ by protocol and require non-public information.
The findings echo earlier warnings from the Financial Stability Board and others that DeFi’s disintermediation can mask new forms of concentration and governance risk that resemble, or amplify, those seen in traditional finance.
Cointelegraph contacted Aave, Uniswap, MakerDAO, and Ampleforth; no responses were received by publication. Cointelegraph is committed to independent, transparent journalism and produces news in accordance with its Editorial Policy.