DeFi, Not So Decentralized: The Measured Distribution of Voting Rights

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dc.contributor.authorBarbereau, Tom
dc.contributor.authorSmethurst, Reilly
dc.contributor.authorPapageorgiou, Orestis
dc.contributor.authorRieger, Alexander
dc.contributor.authorFridgen, Gilbert
dc.date.accessioned2021-12-24T18:14:56Z
dc.date.available2021-12-24T18:14:56Z
dc.date.issued2022-01-04
dc.description.abstractBitcoin 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.extent10 pages
dc.identifier.doi10.24251/HICSS.2022.734
dc.identifier.isbn978-0-9981331-5-7
dc.identifier.urihttp://hdl.handle.net/10125/80074
dc.language.isoeng
dc.relation.ispartofProceedings of the 55th Hawaii International Conference on System Sciences
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 International
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/4.0/
dc.subjectBlockchain Cases and Innovations
dc.subjectblockchain governance
dc.subjectcryptocurrency
dc.subjectdecentralized autonomous organization
dc.subjectdecentralized finance
dc.subjectfinancial regulation
dc.titleDeFi, Not So Decentralized: The Measured Distribution of Voting Rights
dc.type.dcmitext

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