Crypto: Us Crypto Policy Pause Fuels Fresh Debate Over Defi And Governance:...

US lawmakers pause the CLARITY Act as DeFi leaders warn the bill still risks developers, DAOs rethink governance and regulators face mounting pressure.

United States lawmakers postponed a planned markup of the Digital Asset Market Clarity Act (CLARITY), delaying progress on a bill intended to define how cryptocurrencies and decentralized finance (DeFi) platforms are regulated and prompting renewed pushback from DeFi leaders who say the bill still fails to adequately protect developers.

Industry groups and crypto venture firms warned that proposed amendments could impose requirements that are not suitable for decentralized systems. Representatives from Paradigm and Variant said the current draft leaves unresolved ambiguity over whether DeFi developers and infrastructure providers could be forced to implement Know Your Customer (KYC), register with financial regulators or comply with rules designed for centralized platforms.

The delay follows mounting criticism from across the crypto sector, including public opposition from Coinbase CEO Brian Armstrong, which led Senate Banking Committee Chair Tim Scott to announce a “brief pause.”

Ethereum co-founder Vitalik Buterin called for a rethink of how decentralized autonomous organizations (DAOs) are designed, arguing that most DAOs have become little more than token-voting treasuries.

Buterin said that this model is inefficient, vulnerable and fails to improve on traditional governance systems. He added that DAOs should be purpose-built to support core infrastructure like oracles, onchain dispute resolution, insurance decisions and long-term project stewardship.

He also outlined how different governance issues require different structures, distinguishing between cases that benefit from decisive leadership and broad compromise.

DeFi protocol Pendle is revamping its governance model by phasing out its vePENDLE token and introducing a new liquid staking and governance token, sPENDLE.

The team said vePENDLE’s long lock-up periods, lack of transferability and complex voting mechanics limited participation, even as the protocol grew to nearly $3.5 billion in total value locked (TVL).

The new token aims to lower the barriers by allowing withdrawals after a 14-day unwinding period, enabling integrations across other DeFi platforms and simplifying governance participation.

Source: CoinTelegraph