Fungible governance tokens deliver liquidity and transparency in DAO voting rights, but because they are tradable they simultaneously create exposure to vote buying and manipulation.
Source quote, verbatim
These tokens represent voting rights and can be traded, providing liquidity and transparency but also risking vote buying and manipulation.
Wulf A. Kaal, DAO Market Meta Analysis 2024 (2024). SSRN: https://ssrn.com/abstract=5254152
Holds when
DAOs whose voting rights are represented by tradable fungible tokens
Classification
failuresupport: assertedfailure: vote buying through tradable governance tokensfamily: token-transferability-defectgovernance-designtokenomicsdao
Related claims
extendskaal:claim:4529715-020 Fungible governance tokens expose a DAO to vote buying and other forms of manipulation.
extendskaal:claim:4015908-024 DAO governance built on fungible governance tokens is disfavored and dangerous because governance rights can b...
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