Centralization in DeFi as MIM, SPELL token group considers legal changes.

Centralized business structures are infiltrating decentralized finance (DeFi) as developers of Magic Internet Money (MIM) and SPELL tokens propose a traditional legal framework to replace the DAO overseeing the stablecoin, which currently has a market cap of nearly $700 million.

In a forum post, a project leader called for the Abracadabra DAO to support a “transition of power” to a centralized entity that includes lawyers, jurisdictions, and trustees. These characteristics of a traditional corporation appear contradictory to the concept of a DAO, which is a form of crypto-based business governance where token holders have direct decision-making power.

“Despite our commitment to decentralization, we have recognized the importance of introducing a certain level of centralized legal structure,” wrote the AbracadabraTeam account. “The purpose here is not to disrupt the decentralized nature of Abracadabra; in fact, it is to protect it.”

Abracadabra DAO is the latest crypto project to trade the idealistic decentralized governance for some degree of centralization, following in the footsteps of SushiSwap and other projects. The reasons for these transitions vary, from increased regulatory scrutiny to more practical business concerns.

For Abracadabra DAO, the publicly stated reasons lean towards practicality. AbracadabraTeam stated that the centralized entity would handle the DAO’s intellectual property and server expenses “while still giving control to SPELL token holders.”

SPELL token holders (the governance token of Abracadabra DAO) will vote on the project’s three phases of transition, beginning with selecting a jurisdiction for the new entity. The four countries under consideration are Switzerland, Singapore, Malta, and Bermuda.

The post outlines that phases two and three will determine the roles and operations of the new entity.

As of press time, the SPELL token had experienced a 2.8% decrease in trading over the past 24 hours.

Edited by Nick Baker.