What Prevents a Few Large Holders from Controlling a Project’s Governance?
Various mechanisms are employed to prevent whale control. These include quadratic voting, where a user's voting power increases less than linearly with their stake, and delegation to limit individual influence.
Time-locks on large token transfers can also slow down sudden governance attacks. Additionally, a well-distributed token supply across many unique addresses inherently dilutes the power of any single large holder.
Community participation and transparent governance processes are also crucial deterrents.
Glossar
Large Holders
Concentration ⎊ The term "Large Holders" within cryptocurrency, options trading, and financial derivatives denotes entities or individuals possessing a disproportionately significant quantity of an asset, contract, or token.
Quadratic Voting
Formula ⎊ The core principle employs a cost function where the expense to cast additional votes increases quadratically, typically requiring $n^2$ tokens for $n$ votes.