Despite promises of decentralization, DAOs remain at the mercy of large tokenholders whose inactivity can be just as dangerous as their involvement.
Despite their name, many decentralized autonomous organizations arent autonomous, and control is often centralized among large tokenholders who have the power to sway governance decisions.
Whales or small groups of holders controlling as little as $17 million in tokens can attack protocols controlling over $2 billion in user funds.
Ironically, inactivity from other whales is also a problem. Their outsized voting power can protect protocols from governance attacks but is often wasted away doing nothing in the background.
Participation in the current setup of DAO governance is very low, so the amount of money needed to attack these governance protocols is not so much, Luca Prosperi, CEO of M^0 Labs, tells Magazine.
