1.4 Inefficient governance

#1 Lengthy decision-making chain

The governance process of most DeFi protocols (such as MakerDAO) is cumbersome, and the proposal needs to go through multiple stages of "temperature check-consensus discussion-formal voting-execution", which lasts for 2 to 4 weeks. In extreme market conditions (such as black swan events that cause collateral to plummet), lagging decisions fail to adjust parameters (such as collateral rates, clearing lines) in time, ultimately leading to systemic risks. For example, in the "3.12 Black Swan" event in 2020, MakerDAO failed to adjust the liquidation parameters in time, resulting in a large number of collateral being liquidated at a low price, and the treasury lost more than $40 million.

#2 Community engagement is low

The disconnect between governance rights and revenue rights is the core reason for community apathy. In OlympusDAO V3, although ordinary users hold tokens, they cannot get direct incentives from governance, and their enthusiasm for participating in proposal voting is extremely low. The giant whale, because it has the voice over it, prefers to safeguard its own interests through governance rather than the long-term development of the ecosystem. This "minority-led, majority-bystander" governance ecology makes DeFi's "decentralization" reduced to formalism.

The "impossible triangle" of DeFi governance:

• Reality dilemma: ·MakerDAO average proposal period of 18.7 days, 2021 liquidation parameter adjustment proposal due to process lag, users lost more 22 million dollars ·Governance Benefit Ratio (GPY) < 0.1%: Ordinary user voting revenue is less than gas consumption, resulting in rational apathy (OlympusDAO voter turnout < 5.3%)