ECB Study Raises Doubts Over DAO Decentralization Under EU MiCA Rules

Highlights:

• ECB finds DAO decentralization weak as a few holders control most governance power.
• A small group of voters makes most decisions, as many token holders stay inactive.
• Regulators are looking at developers and exchanges to find who controls DeFi platforms.

Governance in major DeFi protocols remains concentrated despite claims of DAO decentralization, according to a European Central Bank paper. Researchers reviewed the top 100 token holders, the top 20 voters, and 248 governance proposals.

🚨LATEST: EUROPEAN CENTRAL BANK SAYS DEFI DAOS ARE TOO CENTRALIZED…

Europe's MiCA regulation excludes protocols “provided in a fully decentralised manner", but a new report from the ECB suggests many DAOs are not as decentralized as some would like to suggest.

After looking… pic.twitter.com/kG4lKf8urs

— BSCN (@BSCNews) April 1, 2026

The analysis shows that the top 100 holders controlled more than 80% of governance tokens in each protocol. This distribution remained largely unchanged across both periods. Aave and Uniswap showed the highest concentration, where the top five holders controlled close to half of the supply. MakerDAO showed a lower concentration, where the top five holders controlled about 36% of tokens.

Researchers also examined who held these tokens. They linked a large share of tokens to protocol treasuries, founders, and developer allocations. They also identified exchange-linked wallets holding notable shares. Binance appeared across all four protocols as a major holder, with holdings ranging between 2% and 15%.

The study also reviewed what these governance groups controlled. Researchers found that 28% of proposals focused on risk parameters such as loan limits and liquidation thresholds. Another 23% focused on listing new assets. These decisions affect how users borrow, trade, and manage risk on each platform.

This structure shows that a limited group influences both ownership and operational decisions. The ECB states that governance appears distributed on-chain, but control remains concentrated among a few large participants.

A Small Group of Voters and Exchanges Control Most DAO Decisions

The concentration of voting is more pronounced than the concentration of token ownership in all four cases. Most voting is done by a handful of delegates because token holders do not vote. Voting rates were between 4% and 12%, meaning that most voting is left to relatively few voters.

This was most evident in Ampleforth. The top 20 voters controlled 96% of all delegated votes. Uniswap was similar, with the top 18 voters controlling over half of the delegated voting power. This also happened in MakerDAO, with the top 10 voters having 66% of delegated voting power.

Delegation drives this outcome because smaller holders assign their voting rights to active participants. These delegates vote on most proposals and shape final outcomes. Uniswap recorded a 27% delegation rate, which increased the influence of recurring voters.

Researchers also examined who these voters were. They were unable to identify between one-third and almost half of the top voters in the protocols. This makes it difficult to link on-chain voting activity to real-world actors. Of those they identified, individuals, Web3 corporations, venture capital firms, and academic institutions were common.

DAO Decentralization Faces New Tests as Regulators Identify Control Points

These findings affect how regulators apply the EU’s MiCA framework to DeFi platforms. MiCA only excludes services that operate without intermediaries and without central control. Regulators are examining who controls governance decisions, smart contracts, and access points. They are looking at developers, large holders, delegates, and exchange-linked entities.

The Danish Financial Supervisory Authority has stated that no single entity should control upgrades, governance, or user access. Regulators are using these checks to decide whether a system qualifies as fully decentralized.

REGULATION 🇪🇺 | The European Central Bank Working Paper Points to DAOs Falling Within MiCA Framework

The report says:

"As already highlighted, it seems that DAOs often only claim to be decentralised."

The paper goes on to highlight the Danish Financial Supervisory Authority on… pic.twitter.com/D8f0OJBpb7

— BitKE (@BitcoinKE) March 30, 2026