
Compound DAO has recently experienced a significant governance attack, where a delegate successfully passed a proposal to allocate $25 million worth of COMP tokens for a yield farming initiative. The attacker managed to accumulate 682,000 COMP tokens to push the vote through, raising concerns about the vulnerability of decentralized autonomous organizations (DAOs) to governance attacks. This incident highlights the need for more sophisticated DAO designs and governance safeguards. Various experts have suggested potential solutions, including veto committees, incentivizing governance participation, and implementing dual/multi-token voting systems. The attack has also sparked discussions on the importance of accruing value to governance tokens to prevent holder apathy and ensure active participation in governance. The incident has drawn attention to the role of major stakeholders, such as a16z, who had the power to prevent the attack but chose not to vote. Additionally, entities like ByBit and protocols such as zkSync and Penumbra have been mentioned in the context of governance improvements. The Bravo governor and Tally Protocol are also cited as potential frameworks for enhancing DAO security. This governance attack serves as a reminder of the ongoing challenges in DAO governance and the necessity for continuous improvement in security measures.

Theory: All governance tokens will eventually capture a portion of protocol revenues directly. Proof: Gov tokens that don't will fall in price until someone buys a majority stake and votes in a governance proposal to capture revenues.
I am surprised that in 2024 we only have one major DAO (@Optimism) utilizing a reputation system. It has been widely understood that solely plutocratic governance has a broad, unpredictable attack surface. Sadly, simplicity is king & most DAOs just mitigate w/ multisigs. https://t.co/twrKgwstax
Helping DAO security🔐 by using DeepDAO data: This one is related to the governance attack on Compound. Last year we created a Know Your Voters report for the DAO, and part of it was looking at the number of involved delegates. As you can see in the screenshot, only 10… https://t.co/0rGzJMMKbX