DAOs have a big governance problem! 🧐

- Many DAOs are not truly decentralized, control is still in the hands of large "whales".

- Whales can attack the protocol with only $17 million tokens, while the protocol can control over $2 billion in user funds.

- Voting participation is very low, creating opportunities for governance attacks.

Notable examples:

- Humpy proposed Compound DAO to allocate $25 million COMP to their group, Golden Boys.

This proposal was successful on the weekend when few people voted.

- a16z has a large voting power but rarely participates, causing controversy.

Solutions:

- Some new DAOs like Optimism and Cybers DAO have adopted security councils to veto dangerous proposals.

- Compound also introduced Guardian to mitigate governance attacks.

What do you think about this problem? Comment below! 👇

#Crypto#Blockchain#DAO#BTC#DeFi#Governance