kaal:claim:4067783-013

Dispersed, passive token holders cannot defend a DAO: because power in Build Finance DAO was not decentralized, the silent majority of token holders lacked the voting power to block the takeover, after which the attacker minted and sold tokens by draining liquidity pools.

Source quote, verbatim

Because of the lack of decentralized power in the Build Finance DAO, the silent majority of token holders did not have enough voting power to prevent the takeover. As a result, the attacker minted and sold various tokens by draining liquidity pools.

From

Wulf A. Kaal, DAO Fallacies (2022), II.2.b) External Takeovers, p. 8
https://ssrn.com/abstract=4067783 · source PDF

Cite as

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

Holds when

low participation among dispersed token holders

Classification

mechanismsupport: evidencedfailure: Silent majority voting deficitfamily: governance-participation-collapseconsensus-and-securitygovernance-designdefi

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