In the ten largest DAOs in the industry, 90% of the votes come from less than 1% of governance token holders. Chainalysis analysts have come to such conclusions.

Let’s talk about 1/ #DAOs.

In this thread, we break:
How they work
Why is ownership surprisingly concentrated?
Where DAOs are most common and well fundedhttps://t.co/2h0qWbYTNu

— Chainalysis (@chainalysis) 27 June 2022

Experts stressed that such results refute the DAO’s positioning of power as a decentralized way.

The largest token holders can join forces and vote against the remaining 99% of the holders. Experts emphasized that such a distribution could also affect minority shareholders’ views on their role in the development of the project.

A similar picture emerged in terms of submitting the proposals to the votes of the community. These criteria are met at best by one owner per thousand, at worst by one in ten thousand. At the same time, one out of 30,000 or even 10,000 owners has enough coins to win the necessary vote to approve the offer.

Excessive concentration of voting rights in the DAO can lead to decisions that go against the principles of decentralization on which Web3 is built.

As an example, analysts cited the Solend crypto loan protocol. The project community has proposed introducing margin requirements to neutralize the risk of platform bankruptcy for large users. Out of 1.1 million yes votes and 30,000 no votes, more than 1 million came from a single user. Without his participation, the quorum would not have been achieved.

Recall that the full version of the bipartisan bill on regulation of the crypto industry was presented in the US Senate. Among its provisions is the need for legal registration of the DAO.

Remember what Web3 is and ForkLog is explained on the cards.

Read ForkLog bitcoin news in our Telegram – cryptocurrency news, courses and analysis.