Less than 1% of Members on Most DAOs Have 90% Voting Power, Says Latest Chainalysis Report

DeFi-related DAOs have a giant lead accounting for 83% of all DAO treasury value and 33% of all of the DAOs by count.

In a recent report, Chainalysis says that by analyzing the distribution of ten major DAOs’ governance tokens, it has discovered that across several major DAOs, less than 1% of all holders have 90% of voting power.

This has meaningful implications for DAO governance. For example, if just a small portion of the top 1% of holders worked together, they could theoretically outvote the remaining 99% on any decision. 

This concentration of decision-making power was evident with the Solana (SOL)-based lending DAO, Solend. The Solend team tried to take over a whale’s account and liquidate it 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 against 30,000 ‘no’ votes, however, out of these total ‘yes’ votes, 1 million came from a single user holding large amounts of governance tokens. The vote was later overturned after a heavy lash back.

While all token holders can vote, the right to make a new proposal for the community and to pass it is not very easy for everyone, given the number of tokens required to do so.

Based on 10 DAOs’ proposal requirements verticals, Chainalysis found that:

  • A user must hold between 0.1% and 1% of the outstanding token supply to create a proposal
  • Auser must hold between 1% and 4% to pass it

Using these ranges as lower and upper bounds, the researchers found that between one in 1,000 and one in 10,000 of these 10 DAOs’ holders have enough tokens to create a proposal. When it comes to single-handedly passing a proposal, between one in 10,000 and one in 30,000 holders have enough tokens to do so.

The report however finds that DAOs span the entire length of Web3. However, they are more popular within the following verticals (in order of popularity):

  • DeFi
  • Venture Capital
  • Infrastructure
  • NFTS
  • Philanthrophy

DeFi-related DAOs have a giant lead accounting for:

  • 83% of all DAO treasury value
  • 33% of all of the DAOs by count

In terms of origin of funds, only 17.9% of DAO treasury funds came from centralized services, while the remaining 82.1% originated from decentralized services. This suggests that most DAO contributors also engage with DeFi platforms and likely self-host their cryptocurrency.



Follow us on Twitter for the latest posts and updates

Join and interact with our Telegram community