Vote-buying on Arbitrum sparks fears of DAO governance integrity

The latest example of voting on arbitrum has raised serious concerns concerning the integrity of the DAO governance model, potentially exposing holders at significant risks.

Decentralized autonomous organizations have promised to make finances more decentralized and free. However, on Tuesday April 8, a case of purchase Dao Votes have revealed serious problems with the model. Namely, an individual spent 5 ETH to buy around 19.3 million arbitrum (ARB) voting power.

This amounted to about $ 10,000 spent to influence decisions involving about $ 6.5 million in governance, more than the voting power of the main delegates such as L2Beat and Wintermute. The user, known as hitmonlee.eth, used Lobbyfi, a platform that allows chip holders to monetize their governance power by praising it.

In this case, the votes were used to support the candidacy of Cupjoseph for a siege to the arbitrum surveillance and transparency committee. The fact that the purchase of voting was used to influence the results of an election to the transparency committee raised serious concerns concerning the legitimacy and security of DAO governance.

According to Ignas de Pink Brains, the surveillance role pays $ 7,500 per month for 12 months. This suggests that the purchase of votes could be financially encouraged, not only ideological. More broadly, he demonstrates that DAO governance structures using a voting model in Une-Seul could be likely to manipulate.

Dao votes to buy security risks

In July 2024, the DAO compound narrowly adopted a vote that granted $ 24 millionOr 5% of the treasure, with an outdoor protocol. Namely, the protocol was under the control of one of the main holders of compatation that pushed the movement. This decision, which came after two unsuccessful previous attempts, was characterized by other DAO members as a governance attack.

The risk of platforms like Lobbyfi is that they can considerably reduce the cost of governance attacks. Breeding actors can now influence the key decisions of the DAO to a fraction of the money they would need differently. This allows them to enrich themselves, at the cost of chip holders and the DAO itself.