The SEC has loosened restrictions on DeFi: DAO voting doesn't equal centralization; the real red line is control! The SEC has finally clarified a long-standing issue plaguing the DeFi industry: Does token holder participation in governance and voting lead to a blockchain being deemed centralized? The SEC: Generally not. As long as governance participants are independent and haven't reached any formal or informal agreements for coordinated action outside the governance mechanism, they won't be considered a central party jointly controlling the network simply because they hold tokens and participate in voting. Even if they are considered a group, they must further prove they actually possess operational, economic, or voting control. The SEC also clearly outlined several key red lines for centralization: The ability to unilaterally decide who can access the network; The ability to change voting procedures for software upgrades, protocol changes, or token allocations; The ability to control who is eligible to participate in verifying transactions; The ability to modify protocol rule code, reverse transactions, or revoke access permissions. The SEC is now focusing on who truly has the ability to control and change the network, rather than simply looking at whether there is a foundation, DAO, or how many people hold governance tokens. Another crucial detail: functionality and decentralization are two independent criteria. A protocol may possess full functionality, but its degree of decentralization can still vary, ultimately depending on how actual control is distributed.