# kaal:claim:4015908-024

**Claim.** DAO governance built on fungible governance tokens is disfavored and dangerous because governance rights can be bought on open exchanges, whereas non-fungible reputation governance assures the highest levels of decentralization.

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

**Holds when.**

- DAO governance rights are tradeable on open exchanges

**Source quote.**

> DAO governance that revolves around fungible governance tokens is disfavored and dangerous in this context as governance rights can be bought on open exchanges. By contrast, non-fungible reputation governance of the DAO assures highest levels of decentralization.

**From.** Wulf A. Kaal, *Fair Token Launch* (2022), III.2.d(1) Level of Decentralization, page 12

**Cite as.** Wulf A. Kaal, Fair Token Launch (2022). SSRN: https://ssrn.com/abstract=4015908

**Verify.** sha256 of source PDF `e0925afde0c42a16cd5310983789fae3eb3d1f121e2954a72afa64191d00fe37` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202022%20-%20Fair%20Token%20Launch.pdf

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

**Topics.** dao, governance-design, tokenomics, reputation, decentralization

**Keywords.** dao, governance-tokens, reputation-systems, decentralization, vote-buying

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/4529715-020
- extended_by: https://wulfkaal.github.io/claims/5254152-003
- supported_by: https://wulfkaal.github.io/claims/4067783-012
- extends: https://wulfkaal.github.io/claims/3981021-024
- generalizes: https://wulfkaal.github.io/claims/5254152-037

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