TL;DR
The European Central Bank has taken a sharper look at one of DeFi’s favorite assumptions and found something much less distributed beneath the surface. The paper’s central warning is that governance in major protocols may look decentralized in theory while remaining tightly concentrated in practice. In a working paper ECB staff examined Aave, MakerDAO, Ampleforth and Uniswap and concluded that the top 100 governance-token holders controlled more than 80% of supply in each case. That finding alone complicates the idea that large DeFi protocols naturally operate as broadly dispersed systems.
The concentration does not stop at token ownership. When the ECB looked at who actually influences proposals, delegated voting power appeared clustered in an even narrower group. The paper found that the top 20 voters in Ampleforth controlled 96% of delegated voting power, while the top 10 in MakerDAO held 66% and the top 18 in Uniswap held 52%. Around one-third of top voters could not be publicly identified. Among those who could, the largest groups were individuals and Web3 companies, followed by university blockchain societies and venture firms.
That matters because governance is not merely symbolic. The paper argues that many of the proposals being decided shape risk itself, making concentration a market-structure issue rather than a cosmetic one. According to the analysis, the largest share of proposals concerns risk parameters that define how protocols operate. The authors also said a large portion of governance tokens could be linked either to the protocols themselves or to exchanges, with Binance identified as the largest centralized exchange holder across all four protocols. From public data alone, however, it remains unclear who ultimately controls many of those positions.
The broader implication reaches directly into European regulation. If control is difficult to map and decentralization is less complete than advertised, then drawing the line around MiCA becomes much harder. The paper says the findings challenge the view that DAOs are inherently decentralized and complicate efforts to identify reliable regulatory anchor points under the EU’s Markets in Crypto-Assets framework, which excludes fully decentralized services. It also cautions that the research does not capture the full DeFi ecosystem and reflects the authors’ views, not official ECB policy. For policymakers, that leaves decentralization looking less binary and more like a spectrum to supervise.
