What Are the Primary Governance Risks in a DAO Managing a Derivatives Protocol?
Key risks include voter apathy, where a small group of active token holders can exert disproportionate control, leading to centralization risk. Another risk is malicious governance proposals, where a whale or coordinated group could vote to drain the treasury or alter protocol parameters for personal gain.
Furthermore, smart contract bugs in the governance module itself pose a critical technical risk to the protocol's security and financial integrity.
Glossar
Governance Risks
Framework ⎊ Governance Risks, within cryptocurrency, options trading, and financial derivatives, represent a multifaceted challenge stemming from the decentralized and often novel structures governing these assets and markets.
Off-Chain Signaling
Mechanism ⎊ Off-Chain signaling within cryptocurrency derivatives represents a communication protocol utilized to convey intent or information without directly recording transactions on a blockchain, often employed to manage latency or circumvent on-chain limitations.