How Does a “Governance Attack” Differ from a 51% Attack?
A governance attack targets the decision-making process of a blockchain, typically a decentralized autonomous organization (DAO), rather than the transaction ledger. It involves acquiring enough voting power (e.g. through holding a large number of governance tokens) to pass malicious proposals, such as draining the treasury or changing core protocol parameters.
A 51% attack is a technical manipulation of the ledger; a governance attack is a political/economic manipulation of the rules.
Glossar
51% Attack
Dominance ⎊ The 51% attack, within cryptocurrency contexts, represents a scenario where a single entity or coalition controls more than half of a blockchain network's hashing power or stake.
Dao
Governance ⎊ A Decentralized Autonomous Organization, or DAO, represents a new form of organizational structure where decision-making authority is distributed among token holders rather than concentrated in a central entity.
Governance Attack
Exploitation ⎊ A Governance Attack within cryptocurrency, options, and derivatives contexts represents a manipulation of on-chain voting mechanisms to enact proposals detrimental to the protocol’s long-term viability or to extract value illegitimately.
Technical Manipulation
Manipulation ⎊ Technical manipulation in cryptocurrency markets involves exploiting vulnerabilities within a blockchain protocol or smart contract to gain an unfair advantage in trading or derivatives markets.
Decentralized Autonomous Organization
Governance ⎊ Decentralized Autonomous Organizations represent a novel framework for coordinating collective action, particularly relevant within cryptocurrency ecosystems and increasingly, financial derivatives markets.
Acquiring Enough Voting Power
Control ⎊ This refers to the strategic accumulation of governance tokens or staked assets sufficient to influence protocol decisions within a Decentralized Autonomous Organization (DAO).