# kaal:claim:4067783-005

**Claim.** 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.

**Type.** mechanism  **Support.** argued

**Holds when.**

- governance rights attached to fungible, purchasable tokens

**Source quote.**

> 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, page 5

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

**Verify.** sha256 of source PDF `48f1e307cdbbe28c7843f7744d0ba8cf01662f257a53f2066a7a6c7e03a5acec` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202022%20-%20DAO%20Fallacies.pdf

**Failure mode.** Whale capture through purchasable voting power  (family: plutocratic-capture)

**Topics.** tokenomics, regulatory-failure, governance-design

**Keywords.** fungible-tokens, whale-capture, voting-power, hostile-takeover, governance

**Related claims.**

- extends: https://wulfkaal.github.io/claims/3799320-014
- extended_by: https://wulfkaal.github.io/claims/4529715-027

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