What Is the Principal-Agent Problem in the Context of DAO Governance and Large Token Holders?

The principal-agent problem arises when the "agents" (large token holders or core team members who execute proposals) may act in their own self-interest rather than the best interest of the "principals" (the entire community or all token holders). In a DAO, this is exacerbated if a few large whales can pass proposals that benefit them but are detrimental to the long-term health or decentralization of the protocol.