What Are the Risks Associated with Holding a Large Percentage of a Protocol’s Governance Tokens?

Holding a large percentage of governance tokens carries the risk of regulatory scrutiny, as it may be viewed as a central point of control, potentially leading to a security classification for the token. Operationally, it exposes the holder to potential legal liability for protocol decisions and makes them a primary target for hackers or malicious proposals.

It also creates a high concentration risk in their investment portfolio.