In this episode, we cover both recent events + evergreen governance questions in political systems: Specifically, we breakdown the recent Compound “governance attack”... as well as the broader topic of DAO governance and voting in general. We also discuss how to avoid, prevent, and respond to such governance attacks -- highlighting key differences between on-chain/ token-based/ digital voting systems vs. physical-world political systems around the world.
What happens when you have activity from actors that the majority doesn’t necessarily agree with? How do you distinguish between good-faith and bad-faith activity, especially on-chain? And other such tricky questions?? Our experts answering these questions (in conversation with Sonal Chokshi) include:
- a16z crypto CTO Eddy Lazzarin;
- head of network operations Ross Shuel;
- and a16z crypto research collaborator, and Stanford professor of political science, Andrew Hall.
The episode begins by quickly recapping the exact sequence of a recent Compound governance “attack” event a few weeks ago -- including discussing whether “governance attack” is the right label for it or not; how it’s different from other attacks; and the broader trend of online vs offline governance attacks in general -- before then going into specific solutions. The team also shares some behind-scenes tick tock on what happened, how people figure out motives behind actions on-chain (especially given the "indistinguishability problem"), and much more.
Pieces mentioned in this episode and other resources:
DAO governance attacks, and how to avoid them by Pranav Garimidi, Scott Duke Kominers, Tim Roughgarden
The DUNA: An Oasis For DAOs by Miles Jennings and David Kerr
Governance FAQs by Andrew Hall
A new financial model for app tokens: How to generate cash flows by Mason Hall, Porter Smith, Miles Jennings, and Ross Shuel
all things DAOs on a16zcrypto.com
all things decentralization on a16zcrypto.com
Voting, Security, and Governance in Blockchains (a16z Podcast, 2019) with Phil Daian and Ali Yahya (see also "On-Chain Vote Buying and the Rise of Dark DAOs" by Phil Daian, Tyler Kell, Ian Miers, and Ari Juels)
PoS Blockchains - Designs, Consensus, Attacks (web3 with a16z Podcast, 2022) with Valeria Nikolaenko, Tim Roughgarden, Sonal Chokshi
Lightspeed Democracy: What web3 organizations can learn from the history of governance by Andrew Hall and Porter Smith
Governing democracy, the internet, and boardrooms (web3 with a16z Podcast, 2024) with Noah Feldman, Andrew Hall, Robert Hackett
As a reminder: None of this should be taken as business, investment, legal, or tax advice; please see a16z.com/disclosures for more important information -- including a link to a list of our investments.