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BTCC / BTCC Square / Global Cryptocurrency /
DAO Governance Faces Scaling Limits as Major Protocols Shift Toward Partial Centralization

DAO Governance Faces Scaling Limits as Major Protocols Shift Toward Partial Centralization

Author:
Global Cryptocurrency
Published:
2026-01-27 18:49:01
19
1
BTCCSquare news:

Decentralized autonomous organizations (DAOs) are hitting governance capacity limits, prompting some of the largest protocols to revert to partial centralization. The model—once hailed as the future of decentralized decision-making—is evolving under the weight of operational inefficiencies and the need for rapid emergency actions.

Despite holding $13.6 billion in total liquidity across 50,845 organizations, DAOs struggle with voter engagement. Only 3.3 million of 11.8 million token holders actively participate in governance. Whales dominating votes and contentious decisions—like Optimism DAO's disputed OP token buyback—have exposed systemic vulnerabilities.

The past year saw several high-profile DAOs abandon pure on-chain governance. 'Decentralized governance has reached its scaling threshold,' noted an analysis by a voter advocacy group. Protocols now prioritize hybrid models, blending decentralized ideals with centralized execution speed.

|Square

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