kaal:claim:4067783-005

Governance by fungible tokens lets whales control a fundraiser DAO, which is antithetical to decentralized governance, and selling purchasable voting power via fungible tokens creates the risk of hostile takeover or looting.

Source quote, verbatim

Governance through fungible tokens in fundraiser DAOs allows whales to control the DAO, which is antithetical to the idea of DAOs overall and decentralized governance of DAOs specifically. More specifically, selling purchasable voting power via fungible tokens risks hostile takeovers or looting.

From

Wulf A. Kaal, DAO Fallacies (2022), II.1 Myth #1: Fundraising, p. 5
https://ssrn.com/abstract=4067783 · source PDF

Cite as

Wulf A. Kaal, DAO Fallacies (2022). SSRN: https://ssrn.com/abstract=4067783

Holds when

governance rights attached to fungible, purchasable tokens

Classification

mechanismsupport: arguedfailure: Whale capture through purchasable voting powerfamily: plutocratic-capturetokenomicsregulatory-failuregovernance-design

Related claims

extends kaal:claim:3799320-014 When fungible assets are the dominant incentive design in the governance of a DAO with identifiable actors, ra...
extended_by kaal:claim:4529715-027 Meaningful accessibility in a DAO is impossible if voting rights and ownership are merely passive purchasable ...

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