Ethereum co-founder Vitalik Buterin has expressed concerns about vulnerabilities in some new solutions in the Decentralized Autonomous Organization (DAO) space. Using Futarchy as an example, Buterin highlighted a bribeable layer for the utility function. He also emphasized the importance of designing robust governance systems for such protocols.
For more information, check out Vitalik Buterin’s tweet here.
In a recent tweet, Buterin referenced a 2021 article where he discussed the potential for hackers to exploit these vulnerabilities and manipulate the system. He believes that the vulnerability of coin voting lies in the combination of economic interests and the right to participate in governance. Buterin further elaborated that while these systems aim to align power and responsibility, it is easy to separate the two.
Related: Buterin Explores Plutocracy Risks in Token-Based Governance
The emergence of new decentralized governance models that enable participants to “rent” their votes has sparked concerns within the blockchain community. Many analysts believe that this innovation comes with various issues, including delegation costs, procedural complexities, and preferences of large token holders.
However, some analysts are skeptical about the sustainability of these voting markets, particularly amidst the criticism they are facing. Some argue that the practice of selling votes poses governance challenges beyond the immediate protocol. Instead of allowing users to relinquish their voting rights, many suggest providing them with better avenues to express their opinions.
Related: Drift Protocol’s Roadmap to Decentralized Governance and Inclusion
It is crucial to note that Buterin, in his 2021 article, predicted the increasing popularity of decentralized governance, deeming it a risky but necessary development in the blockchain industry. At that time, the Ethereum co-founder foresaw the inevitability of this trend and urged the industry to move towards more reliable protocols beyond traditional coin voting mechanisms.
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