# kaal:claim:4067783-013

**Claim.** 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.

**Type.** mechanism  **Support.** evidenced

**Holds when.**

- low participation among dispersed token holders

**Source quote.**

> 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, page 8

**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.** Silent majority voting deficit  (family: governance-participation-collapse)

**Topics.** consensus-and-security, governance-design, defi

**Keywords.** silent-majority, voter-apathy, governance-attack, treasury, liquidity-drain

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