ECB paper: DeFi DAO governance tokens may struggle to meet MiCA exemption criteria.

PANews reported on March 27th, citing Cointelegraph, that a paper by a European Central Bank staff member points out that governance tokens in DeFi protocols are highly centralized. Approximately half or more of the holdings of governance tokens in Aave, MakerDAO, Ampleforth, and Uniswap are linked to the protocols themselves or exchanges. Major voting participants are often delegated representatives, who in many cases are neither identifiable nor able to establish a connection with token holders. This research questions whether DeFi DAOs possess sufficient decentralization to exclude them from the MiCA regulatory framework and provides a reference for policymakers to bring relevant entities under regulation.