How Does the Potential for “Governance Attacks” Affect the Value of a Governance Token?

The potential for governance attacks, where a malicious actor gains enough voting power to pass self-serving or destructive proposals, introduces a significant risk premium to the token's valuation. This risk can severely depress the "governance premium" because the power to influence the protocol's future becomes a liability.

Investors must assess the token distribution, the required quorum, and the time lock on proposals as mitigating factors.