Is DeFi really decentralized?

Editor's Note: This article is from:DeBankView (ID: DeBankView)Editor's Note: This article is from:

DeBankView (ID: DeBankView)

, Author: Ma Buyan, reproduced by Odaily with authorization.

Recently, the community has done a lot of in-depth discussions on the decentralization of DeFi project governance. Many projects have also invested a lot of energy in governance and done a lot of work, but it is still difficult to satisfy the community. This article attempts to use the MakerDAO multi-collateral upgrade a month ago as a case to explain several core elements of the current DeFi governance being criticized.

MakerDAO Launches Multi-Collateral DAI

MakerDAO is a star project in the explosion of DeFi in 2019. The stable currency DAI they launched covers almost all current DeFi projects. It is not an exaggeration to say that they are the cornerstone of the DeFi world.

On November 18, MakerDAO launched a multi-collateralized version of DAI. Before this upgrade, DAI could only be issued by mortgaging ETH, but now BAT is also supported as collateral to issue DAI. The person in charge of MakerDAO stated that more assets will be supported as collateral to issue DAI in the future, and when and which assets will be added to the collateral list of DAI depends entirely on the governance of MakerDAO, which is the MKR token holders to decide the future of the entire system.

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The entire system is ultimately controlled by the holder of the MKR pass, which means that once the voting proposal is not passed, the prepared multi-collateral version upgrade will be put on hold. It is currently the best development practice in the industry that the development team develops and initiates proposals, and the token holders in the community vote to decide whether to pass and upgrade. Is the actual situation as good as imagined? Let's take a look at the voting participation of MakerDAO's multi-collateral version proposal.

In the end, more than 150 addresses holding MKR tokens voted for the multi-collateral lending proposal, and this vote is already one of the proposals with the highest voting rate so far. However, through statistics, it is found that 5 addresses accounted for more than 50% of the votes. In other words, the votes of the remaining 140 people are just a formality, and have no practical use.

Through the statistics of MKR holding addresses on etherscan, it can be found that there are more than 16,000 addresses holding MKR, but in fact, most of MakerDAO’s proposals have less than 30 addresses participating in voting, and proposals with more than 150 addresses participating are indeed Already one of the most highly voted proposals. What caused such a low turnout?

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On-chain voting governance

Except for retail investors who have no sense of existence and have no motivation to vote. Monahan, the founder of MyCrypto, as an early investor and loyal supporter of MKR, also said that she has never participated in MKR's voting governance, because this matter is still too cumbersome for her.

Therefore, the cumbersome voting on the chain and the centralization of voting governance based on the POS mechanism not only plague the current mainstream POS chain, but also a hurdle for the current DeFi project to move towards decentralized governance.

According to the distribution of MKR tokens in etherscan above, except for multi-signature contract accounts and governance contract accounts, MKR is not inferior to most other projects in terms of the distribution of tokens in the remaining addresses. , but in terms of governance participation, it is indeed far from the goal of DeFi.

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Take the most common interest adjustment in MakerDAO governance as an example. If the interest rate is increased, the interests of CDP holders will be damaged, and the interest rate in the secondary lending market such as Compound will also increase, benefiting DAI holders; On the contrary. In this upgrade of multi-collateralized DAI, the liquidation income of PETH is removed, and MKR holders bear the risk of liquidation and enjoy its benefits, so this upgrade affects the interests of the original PETH holders. And these participants do not have any say in the entire governance process of MakerDAO.

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Compared with the negative attitude of MKR holders towards governance participation, these users who really use DeFi products and hope to participate in community governance have no effective channels.

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