DAOs are organizations while not a centralized hierarchy and were supposed to figure during a bottom-up manner, so the community put together owns and contributes to the decision-making process. However, recent analysis of knowledge suggests that these DAOs don’t seem to be as redistributed because they were intended to be. Redistributed autonomous organizations (DAOs) became a rage within the ever-expanding crypto scheme and are usually seen as the way forward for decentralized company governance.
A recent report from Chainalysis analyzed the workings of ten major DAOs comes and located that on average, below 1% of all holders have 90% of the selection power. The finding highlights a high concentration of decision-making power within the hands of a specific few, a difficulty DAOs were created to resolve.
Solend team tried to require over whale account
This concentration of decision-making power was evident with the Solana (SOL)-based loaning DAO Solend. The Solend team tried to take over a whale’ account and execute the liquidation themselves via over-the-counter (OTC) desks to avoid cascading liquidations across the DEX books. The proposal to take over was passed with 1.1 million “yes” votes to 30,000 “no” votes, however, out of those total “yes” votes, 1 million came from one user holding giant amounts of governance tokens. The vote was later turned when a significant lash back.
Creating call for all DAO holders isn’t straightforward
The Chainalysis report highlighted that though all governance token holders have selection rights, the correct to create a brand-new proposal for the community and to pass it’s not terribly easy for everyone, given the quantity of tokens needed to try to do so. The report calculable that between one in 1,000 and 1 in 10,000 governance token holders have enough tokens to make a proposal. Once it comes to passing a proposal, solely between one in 10,000 and 1 in 30,000 holders have enough tokens to try to do so.
The redistributed finance (DeFi) scheme accounts for 83% of all DAO treasury price control and 33% of all the DAOs by count. Excluding DeFi, venture capital, infrastructure and Non-Fungible tokens (NFTs) are different ecosystems that have seen an increase in range of DAOs.
Source: https://www.thecoinrepublic.com/2022/06/28/less-than-1-dao-holders-can-take-90-decisions/