A new working paper from the European Central Bank (ECB) reveals that governance in leading DeFi protocols is far more concentrated than commonly assumed. The study examined Aave, MakerDAO (now rebranded as Sky Protocol), Ampleforth, and Uniswap, finding that the top 100 governance token holders control over 80% of all tokens in these ecosystems.
This concentration gives a small group outsized influence over protocol decisions, including upgrades, fee structures, and treasury management. In many cases, large holdings are linked to the protocols themselves or to centralized exchanges, making it difficult to distinguish between genuine user control and custodial arrangements.
The paper notes that many of the most influential voters are delegates whose identities cannot be reliably linked to specific token holders. This opacity complicates efforts to determine who actually wields power in DeFi governance. As a result, traditional regulatory “anchor points” — such as token holders, core developers, or exchanges — may not be reliable for oversight purposes.
The researchers also challenge the narrative that DeFi protocols naturally become more decentralized over time. Even protocols approaching a decade in operation, such as Aave, Uniswap, and MakerDAO, continue to show high levels of concentration that cannot be explained solely by early token distribution.
The ECB paper suggests these findings could significantly shape how policymakers design frameworks to bring “relevant entities under the regulatory umbrella.” The difficulty in mapping governance power raises questions about how to apply rules around responsibility, liability, and consumer protection in decentralized systems.
The concerns echo statements from within the DeFi community. Aave founder Stani Kulechov recently described DAO governance as “extraordinarily difficult,” citing slow decision-making, multiple voting rounds, and internal politics that hinder progress. Many developers are actively experimenting with new governance models to balance decentralization with efficiency.
