DeFi, Not So Decentralized: The Measured Distribution of Voting Rights Barbereau, Tom Smethurst, Reilly Papageorgiou, Orestis Rieger, Alexander Fridgen, Gilbert 2021-12-24T18:14:56Z 2021-12-24T18:14:56Z 2022-01-04
dc.description.abstract Bitcoin and Ethereum are frequently promoted as decentralized, but developers and academics question their actual decentralization. This motivates further experiments with public permissionless blockchains to achieve decentralization along technical, economic, and political lines. The distribution of tokenized voting rights aims for political decentralization. Tokenized voting rights achieved notoriety within the nascent field of decentralized finance (DeFi) in 2020. As an alternative to centralized crypto-asset exchanges and lending platforms (owned by companies like Coinbase and Celsius), DeFi developers typically create non-custodial projects that are not majority-owned or managed by legal entities. Holders of tokenized voting rights can instead govern DeFi projects. To scrutinize DeFi’s distributed governance strategies, we conducted a multiple-case study of non-custodial, Ethereum-based DeFi projects: Uniswap, Maker, SushiSwap, Yearn Finance, and UMA. Our findings are novel and surprising: quantitative evaluations of DeFi’s distributed governance strategies reveal a failure to achieve political decentralization.
dc.format.extent 10 pages
dc.identifier.doi 10.24251/HICSS.2022.734
dc.identifier.isbn 978-0-9981331-5-7
dc.language.iso eng
dc.relation.ispartof Proceedings of the 55th Hawaii International Conference on System Sciences
dc.rights Attribution-NonCommercial-NoDerivatives 4.0 International
dc.subject Blockchain Cases and Innovations
dc.subject blockchain governance
dc.subject cryptocurrency
dc.subject decentralized autonomous organization
dc.subject decentralized finance
dc.subject financial regulation
dc.title DeFi, Not So Decentralized: The Measured Distribution of Voting Rights
dc.type.dcmi text
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