What Is the Risk of Voting Power Centralization If Large Holders Acquire a Majority of Governance Tokens?

The primary risk is that the DAO ceases to be decentralized, effectively becoming controlled by a small group of "whales." This can lead to decisions that benefit the large holders at the expense of the wider community, such as altering fee structures or allocating treasury funds to their own projects. Such centralization undermines the core ethos of a DAO, erodes trust among smaller participants, and can make the protocol vulnerable to hostile governance takeovers.

It creates a plutocracy where voting power is directly proportional to wealth.