Why Synthetix’s Kain Warwick Thinks DeFi Governance Has Gotten Worse

DeFi is teeming with interesting governance experiments, from Lido Finance’s DAO brokering a $14.5 million deal with venture firm Dragonfly to Maker’s DAO racing to push its decentralized stablecoin DAI back on top of Terra’s UST before Terra collapsed. 

But not all of these experiments have been successful. 

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One DAO reneged on its own community’s vote to use some of the project’s treasury to make victims of a hack whole. And DeFi guru Kain Warwick, the founder of Synthetix, has much harsher words for the state of play. 

During an in-depth discussion with Decrypt’s Dan Roberts at Chainlink SmartCon last week, Warwick said he believes DeFi governance “is actually worse today” than one year ago.

“Governance just gets thrown out the window during a bull market, right?” Warwick said. “No one cares, it’s like, ‘Let’s just try and move as quickly as possible, do the dumbest possible thing only.’ All of that stuff that is really critical, but takes a lot of thoughtfulness, and experimentation just gets blown away.”

The biting criticism holds particular weight given Synthetix’s role in basically creating what we now call decentralized finance. Synthetix, a platform that lets users hold and trade tokens that track the price of real-world assets “synthetic” versions), was an early pioneer of yield farming as a token distribution model. The project was also one of the first to spin out into three different DAOs to support Synthetix: ProtocolDAO, GrantsDAO, and SynthetixDAO. 

“Governance theater”

Warwick’s influence over the space can’t be understated. In that same conversation, he also pointed out the next key problem crypto governance needs to solve: “governance theater.”