# What Is a "Governance Attack" on a Mutable Contract? ⎊ Path

**Published:** 2025-12-04
**Author:** Greeks.live
**Categories:** Path

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## What Is a “Governance Attack” on a Mutable Contract?

A governance attack occurs when an attacker gains enough voting power (e.g. by acquiring or borrowing a majority of governance tokens) to pass a malicious proposal. In a mutable contract, this proposal could be an upgrade that points the proxy to a contract designed to steal funds or halt operations.

This is often executed via a flash loan to temporarily acquire the necessary tokens.

- [How Does a Flash Loan Potentially Facilitate a Governance Attack?](https://learn.greeks.live/path/how-does-a-flash-loan-potentially-facilitate-a-governance-attack/)

- [What Is a ‘Governance Attack’ in the Context of a DAO?](https://learn.greeks.live/path/what-is-a-governance-attack-in-the-context-of-a-dao/)

- [What Are the Primary Risks Associated with Deploying a Mutable Smart Contract?](https://learn.greeks.live/path/what-are-the-primary-risks-associated-with-deploying-a-mutable-smart-contract/)

- [How Can Time-Locks Mitigate the Security Risks of Mutable Contracts?](https://learn.greeks.live/path/how-can-time-locks-mitigate-the-security-risks-of-mutable-contracts/)

- [What Is a “Flash Loan” and How Is It Enabled by Smart Contracts?](https://learn.greeks.live/path/what-is-a-flash-loan-and-how-is-it-enabled-by-smart-contracts/)

- [What Is a Flash Loan and How Is It Often Used in MEV Strategies?](https://learn.greeks.live/path/what-is-a-flash-loan-and-how-is-it-often-used-in-mev-strategies/)

- [How Does a Time-Lock Mechanism Mitigate the Risk of a Malicious Upgrade?](https://learn.greeks.live/path/how-does-a-time-lock-mechanism-mitigate-the-risk-of-a-malicious-upgrade/)

- [Explain the Concept of “Rug Pull” in Relation to Mutable Contract Ownership](https://learn.greeks.live/path/explain-the-concept-of-rug-pull-in-relation-to-mutable-contract-ownership/)

## Glossar

### [Governance Attack](https://learn.greeks.live/area/governance-attack/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

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.

## Discover More

### [What Is a 'Perpetual Contract' and How Does It Differ from a Traditional Futures Contract?](https://learn.greeks.live/path/what-is-a-perpetual-contract-and-how-does-it-differ-from-a-traditional-futures-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a 'Perpetual Contract' and How Does It Differ from a Traditional Futures Contract?](https://learn.greeks.live/wp-content/uploads/2025/10/Crystalline-Geometric-DeFi-Volatility-Instrument-Representing-Perpetual-Swaps-Structure.webp)

Perpetual contracts are like futures but have no expiration date, using a 'funding rate' to anchor the price to the spot market.

### [How Should an Investor Evaluate the Credibility of a Smart Contract Auditing Firm?](https://learn.greeks.live/path/how-should-an-investor-evaluate-the-credibility-of-a-smart-contract-auditing-firm/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Should an Investor Evaluate the Credibility of a Smart Contract Auditing Firm?](https://learn.greeks.live/wp-content/uploads/2025/10/Quantum-Ledger-Integration-Point-Illuminated-Through-Encrypted-Digital-Infrastructure-Gateways.webp)

Evaluate track record, reputation, auditor expertise, and the clarity of public audit reports.

### [Can a Physically-Settled Futures Contract Be Closed out before Expiration?](https://learn.greeks.live/path/can-a-physically-settled-futures-contract-be-closed-out-before-expiration/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Can a Physically-Settled Futures Contract Be Closed out before Expiration?](https://learn.greeks.live/wp-content/uploads/2025/10/Asymmetric-Hedging-Vector-Geometry-Illustrating-Multi-Legged-Option-Strategy-Implementation-in-Decentralized-Finance.webp)

Yes, by taking an opposite and equal position (offsetting) before the last trading day.

### [What Is "Smart Contract Risk" and How Is It Different from Traditional Counterparty Risk?](https://learn.greeks.live/path/what-is-smart-contract-risk-and-how-is-it-different-from-traditional-counterparty-risk/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is "Smart Contract Risk" and How Is It Different from Traditional Counterparty Risk?](https://learn.greeks.live/wp-content/uploads/2025/10/Geometric-Abstraction-Modeling-Volatility-Surface-Dynamics-in-Decentralized-Derivative-Structures.webp)

Smart contract risk is loss from flawed code; counterparty risk is loss from a defaulting party.

### [What Is an Options Contract and What Are the Basic Components of a Crypto Option?](https://learn.greeks.live/path/what-is-an-options-contract-and-what-are-the-basic-components-of-a-crypto-option/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is an Options Contract and What Are the Basic Components of a Crypto Option?](https://learn.greeks.live/wp-content/uploads/2025/10/Interlocking-Crosshatch-Structural-Supports-Representing-Cryptocurrency-Hedging-Instrument-Frameworks.webp)

A crypto option is the right, not obligation, to buy (call) or sell (put) crypto at a set price before a specific date for a fee.

### [What Is a Hashrate Forward Contract?](https://learn.greeks.live/path/what-is-a-hashrate-forward-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a Hashrate Forward Contract?](https://learn.greeks.live/wp-content/uploads/2025/10/Crystalline-Bifurcation-Point-Representing-Volatility-Skew-in-Decentralized-Derivative-Structures.webp)

A private, customizable agreement to buy or sell hashrate at a set price on a future date, used to hedge risk.

### [How Can an Oracle Be Used to Trigger a Margin Call in a Derivatives Contract?](https://learn.greeks.live/path/how-can-an-oracle-be-used-to-trigger-a-margin-call-in-a-derivatives-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Can an Oracle Be Used to Trigger a Margin Call in a Derivatives Contract?](https://learn.greeks.live/wp-content/uploads/2025/10/Sharp-Edge-Bifurcation-Point-Modeling-Volatility-Skew-in-Blockchain-Derivatives-Settlement-Instruments.webp)

The oracle's price update acts as the trigger for the smart contract to execute a margin call or liquidation.

### [What Is a Smart Contract and How Does It Automate the Lifecycle of a Derivative Contract?](https://learn.greeks.live/path/what-is-a-smart-contract-and-how-does-it-automate-the-lifecycle-of-a-derivative-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a Smart Contract and How Does It Automate the Lifecycle of a Derivative Contract?](https://learn.greeks.live/wp-content/uploads/2025/10/Abstract-Visualization-of-Decentralized-Finance-Protocol-Mechanisms-Governing-Settlement-Layers-and-Smart-Contract-Oracles.webp)

A smart contract is code on a blockchain that automatically executes all stages of a derivative trade, from creation to settlement.

### [What Is the Settlement Process for a Cash-Settled Forward Contract?](https://learn.greeks.live/path/what-is-the-settlement-process-for-a-cash-settled-forward-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Settlement Process for a Cash-Settled Forward Contract?](https://learn.greeks.live/wp-content/uploads/2025/10/Symmetric-Quadrant-Liquidity-Pools-Visualizing-Decoupled-Exchange-Settlement-Mechanisms.webp)

On the expiration date, the parties exchange the net difference between the contract's forward price and the asset's current spot price in cash.

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**Original URL:** https://learn.greeks.live/learn/what-is-a-governance-attack-on-a-mutable-contract/
