# kaal:claim:3799320-014

**Claim.** When fungible assets are the dominant incentive design in the governance of a DAO with identifiable actors, rational and opportunistic internal and external participants will typically attempt to corrupt that governance design for their own gain.

**Type.** failure  **Support.** argued

**Holds when.**

- fungible assets used as the dominant governance incentive
- actors who are identifiable

**Source quote.**

> When fungible assets are used as the dominant incentive design in the governance of DAOs with identifiable actors, rational and opportunistic internal constituents and external participants will typically attempt to corrupt the governance design of the DAO for their own gain.

**From.** Wulf A. Kaal, *A Decentralized Autonomous Organization (DAO) of DAOs* (2021), Suboptimal Incentive Design, page 11

**Cite as.** Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320

**Verify.** sha256 of source PDF `c3dff852f2d3f04718c829a24189309a7db4d92d84f6045d3d4f562d87c03e63` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202021%20-%20A%20Decentralized%20Autonomous%20Organization%20%28DAO%29%20of%20DAOs.pdf

**Failure mode.** Fungible governance capture  (family: plutocratic-capture)

**Topics.** tokenomics, governance-design, regulatory-failure, risk-and-incentives

**Keywords.** fungible-tokens, governance-capture, corruption, incentive-design

**Related claims.**

- extended_by: https://wulfkaal.github.io/claims/3808873-038
- specializes: https://wulfkaal.github.io/claims/3441904-018
- extended_by: https://wulfkaal.github.io/claims/4067783-005
- specializes: https://wulfkaal.github.io/claims/3652481-019

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.