The concentration of governance power held steady across both data snapshots, showing little movement. That stability cuts both ways: it suggests existing power structures are durable, and it makes the problem harder to address through market dynamics alone.
The paper also categorized 248 governance proposals across the four protocols. Risk parameters, covering loan-to-value ratios, debt ceilings, stability fees and emergency shutdowns, made up the largest share at 28%. Asset listing proposals accounted for another 23%. Governance structure itself was rarely the subject of a proposal; that category made up only 1% of the sample.
FAQ Who controls DeFi governance tokens? A small number of addresses — mostly protocol treasuries, founders and centralized exchanges like Binance — hold the majority of governance tokens across major DeFi protocols. Can regulators hold DeFi governance participants accountable? ECB researchers found that roughly one-third of top voters could not be identified using publicly available data, making clear lines of regulatory accountability difficult to establish. What is vote delegation in DeFi? Token holders can assign their voting rights to delegates who vote on proposals on their behalf, which the ECB paper found concentrates governance power further rather than distributing it. • Does the EU’s MiCA regulation cover DeFi protocols? MiCA exempts fully decentralized services, but the ECB paper argues most DeFi protocols do not meet a genuine decentralization standard and may fall within regulatory scope.
