DeFi may turn to DAO management
As the DeFi ecosystem continues to suffer from criminal whales, the risks of financial loss in this sector have become increasingly apparent. Because of this, calls for regulation of decentralized finance began in 2021, and the sector began facing enforcement action last year.
KuCoin Labs predicts that as regulators approach DeFi, the industry may turn to DAO governance to reduce regulatory risk.
"If DeFi seeks to mitigate regulatory risk, DeFi's form of governance will gradually become a DAO," KuCoin Labs wrote in its annual report.
According to KuCoin Labs, a DAO that puts community interests first can exercise "true decentralization of governance."
