Who really calls recordings in cripto decision-making? Study Questions for your Democratic Promise

With Donald Trump back in the White House, cryptocurrency still gets a momentum. The Trump administration signaled more practical access to crypto edit. In addition, the Executive Order issued in January is forbidden to develop a digital currency in the Central Bank’s Central Bank (CBDC), the digital dollar “, which seems to favor private cryptocurrencies and stems.

In this variable economic landscape, decentralized autonomous organizations (Daos) are as a step towards a democratic financial future, offering justice, transparency and joint control. However, when it comes to decisions in the Daos, reality may not be as democratic as it seems.

Who holds strength?

Instead of managers such as a director or member of CFO makes decisions, as usual in traditional companies, Daos operates on construction democratic basics. They manage communities, where each participant can vote on key decisions – from how the funds manage to be charged for the fee, which the types of software updates are implemented. These decisions within Dao are made using management Tokens, a type of digital share that gives voting rights to its owners.

But who actually holds these management tokens – and the power they represent?

“In principle, each user can participate in decision-making. However, it remains unclear who these users are, because only pseudonimal addresses are available,” Research Stefan Ksh is available.

A few dominate many

By investigating the participation of users of detained users in decision-making, Kitzler and his colleagues were examined just as many decentralized these organizations are really. Their studyPublished in Financial cryptography and data securityIt reveals that the promise of transparency and democracy often conflicts with the reality of concentrated strength.

“In practice, management tokens are often highly concentrated in the hands of several early adoptions or investors,” says Kitzler.

The team analyzed 35,114 proposals of 872 Daos, including 986,557 voters. They found that in 7.54% of all Daos, associates, such as developers, administrators or project owners who had most votes, sufficiently for decision control. In about 20% of Daos, associates decided at least one proposal for themselves.

The right case

In 2022. year, Tornado Cash, the US government sanctioned a well-known Dao application. Authorities are alleged, used to launder money related to North Korean hackers. Two project programmers were later arrested. While Daos are designed to distribute strength, this case collected about whether they still bring some decisions a handful of insider.

“In our study, we found the signs of” interior laps “in many Daos,” Kitzler says, as the associates were centred in the Dao Management Ecosystem and often not represent a disproportionate high impact. “

“Even in great Daos managed millions of dollars, we sometimes saw signs of unilateral control,” he added Bernhard Haslhofer, which leads a research group of digital currencies in CSH. “It was surprising.”

Token Switch, Transfer Power

Anonymous nature Blocchain transaction makes it difficult to identify the actual owners of these tokens, which makes the management process less transparent and potentially vulnerable to manipulation.

Researchers also noted the tendency to manage tokens to change their hands soon before important votes, which can indicate strategic behavior – or manipulation of decision-making processes in Dao.

With cryptocurrency once again on the rise in popularity and regulatory discussions warming around the world, this study comes in a crucial time.

“There is a growth you need to understand how these systems actually work,” says Haslhofer. “Our findings provide empirical insights that can help form the future regulations – so Daos can fulfill its original promise.”

Study “Managing Decentralized Autonomous Organizations, Networks, Networks and Shifts in Stefan Kitzler, Stefano Balietti, Piefno Balietti, Pietro Baliets, Bernhard Haslhofer and Markus Strohmayer was part of the books in computer science and was involved in International Conference on Financial Cryptography and Data Safety.