TechFlow news, on December 4, a new report from the Cambridge Centre for Alternative Finance found that decentralized autonomous organizations (DAOs) behind DeFi protocols exhibit levels of power concentration comparable to the world's most unequal countries, with governance often dominated by a small number of large participants.
Christopher Jack, head of the Cambridge DeFi Navigator project, led a team that applied the Gini coefficient—a widely used metric for assessing income or wealth inequality within populations—to measure power concentration within DAOs. On this scale, 0 represents perfect equality and 1 represents perfect inequality.
The analysis revealed that the Gini coefficients of the 10 largest DAOs range between 0.97 and 0.99. By comparison, South Africa, the country with the highest income inequality globally, has a Gini coefficient of 0.63.
