A recent report from the European Central Bank (ECB) sheds light on a different side of the DeFi ecosystem, which has long been known as “decentralized.” The research reveals that governance power in several major DeFi protocols is, in fact, highly concentrated among a small number of addresses.

100 Addresses Control Over 80% of Voting Power

According to the report, around 100 top addresses control more than 80% of the voting power in major DeFi protocols such as Aave, MakerDAO, and Uniswap.

This finding suggests that key decisions—ranging from parameter changes and incentive distribution to protocol development direction—may be controlled by a small group rather than the broader community, as is often assumed.

Interestingly, some of these large addresses are known to be controlled by entities such as the protocols themselves or even crypto exchanges, rather than independent individuals.

Delegates Play a Dominant Role in Governance

The ECB report also highlights the significant role of delegates in DAO voting processes. Many token holders choose to delegate their voting rights to specific parties, which ultimately leads to further concentration of power.

In practice, these delegates act as “political representatives” within DAOs, but without consistently clear transparency.

As a result, voting is often dominated by a handful of large delegates, direct community participation declines, and decisions may become biased toward certain interests.

One-Third of Key Voters Remain Unidentified

One of the most critical points in the report is that approximately one-third of major voters cannot be clearly identified. It is unclear whether they are individuals, institutions, or coordinated entities making it difficult for regulators to assess accountability and increasing the risk of governance manipulation.

For regulators, this situation presents a significant challenge in formulating policies around DeFi.

A Challenge to the “Decentralization” Narrative

The ECB’s findings indirectly challenge the core narrative of DeFi: decentralization.

While DeFi is technically built on blockchain and open governance, the reality shows concentrated voting power, decision-making controlled by a minority, and limited identity transparency.

This raises an important question: Is DeFi truly decentralized, or merely “technically decentralized”?

Conclusion

The ECB report reveals that many major DeFi protocols are still far from the ideal of decentralization often promoted.

Power concentration, delegate dominance, and voter anonymity remain key issues that could shape the future of regulation and trust in the DeFi ecosystem.