Decentralized Autonomous Organizations (DAOs) are becoming furious in the ever-expanding crypto ecosystem, often seen as the future of decentralized corporate governance.

DAOs are organizations without a central hierarchy and their purpose was to operate in a bottom-up manner so that the community collectively owns and contributes to the decision-making process. However, recent research data indicates that these DAOs are not as decentralized as they were meant to be.

A recent report from Chainalysis analyzed the businesses of ten major DAO projects and found that, on average, less than 1% of all owners hold 90% of the voting power. This discovery highlights a high concentration of decision-making power in the hands of a select few, a problem that DAOs were created to solve.

This concentration of decision-making power was evident with DAO Solend-based lending (SOL) Solana. Solend’s team attempted to take over a whale account and carry out the liquidation themselves via over-the-counter (OTC) offices to avoid back-to-back liquidations via DEX books.

The takeover proposal passed with 1.1 million “yes” votes to 30,000 “no” votes, however, of the total of these “yes” votes, one million votes came from a single user owning large amounts of governance tokens. The vote was later canceled after a strong lash in the back.

Related: What would a DAO look like for a bank or financial institution

The Chainalysis report highlights that while all governance token holders have voting rights, the right to submit and pass a new proposal to the community is not very easy for everyone, given the number of tokens required to do so.

The report estimated that between 1 in 1,000 and 1 in 10,000 governance token holders have enough tokens to generate an offer. When it comes to passing on an offer, between 1 in 10,000 and 1 in 30,000 holders have enough tokens to do so.

The Decentralized Finance (DeFi) ecosystem accounts for 83% of the total value of the DAO treasury owned and 33% of all DAOs by count. Aside from DeFi, venture capital, infrastructure, and non-fungible tokens (NFTs) are other ecosystems that have seen a rise in the number of DAOs.

Source: CoinTelegraph