How Does a DAO’s Governance Model Respond to a Real-Time Security Exploit of Its Financial Contracts?

A DAO's response can be slower than a centralized entity's due to the need for a governance vote. However, many DAOs implement emergency mechanisms.

This can include a multisig council of trusted community members who are empowered to pause contracts or execute a rapid upgrade in the event of a clear exploit. The proposal for this action is then typically ratified by a full token-holder vote after the immediate threat is contained.

This creates a trade-off between decentralized principles and the practical need for swift action during a crisis.