Patrick Quinn, head of the firm's Distributed Ledger Technology Practice Group, was recently featured in a Sandmark article titled, "Exploit or Just Lax Governance? BonkDAO Drain Exposes Cost of DAO Apathy."
In the article, Patrick comments on certain legal implications of the recent exploit involving the BonkDAO treasury – a blockchain wallet holding funds managed by the decentralized autonomous organization (DAO) behind the Solana-based memecoin BONK.
The DAO wallet recently suffered a loss when a token holder-proposer, exploiting a governance weakness underlying the organization’s majority vote standard, acquired a large block of tokens and used them to push through approval of a proposal authorizing the treasury to transfer $20 million of its funds to the proposer.
The BonkDAO incident reflects potential risks in modern DAO structures, which have become foundational pillars of the blockchain industry – anchoring the governance and treasury management for major DeFi protocols, layer-1 blockchains, and Web3 ecosystems.
Patrick also discusses governance safeguards that could help prevent similar incidents, including treasury review committees, timelocks, supermajority voting thresholds, and multi-signature approvals.
To Read the Article: Click Here
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