Death DAO

The death star (from star wars film)

Problems

Decentralized autonomous organizations (DAOs) need protection. Most simple technical implementation of DAO is multisig wallet or community driven account. The problem that bad actors can simply get majority of governance tokens and do what they want with DAOs treasury. Bad actors can organize the “death DAO” to accumulate money for attacks. Scam DAOs can be organized as well to get money from members. Protocol/smart contracts bugs can be exploited as well.
In addition to such hacks communities itself can be compromised (reputation issues) and finally be destroyed.

Proof links:

1. After seizing control, the new leader drained the DAO’s treasury, liquidity pools, and minted over 1 billion tokens for themselves.
2. The Build Finance DAO has been the target of a hostile governance takeover in which a malicious actor has put forward and succeeded with a proposal to take control of the Build token contract.
3. Deus Finance DAO Hacked; Malicious Actors Took Around $3M

and many more…

$10B treasury

http://deepdao.io/organizations

Simple attack scenario

1. The whale buys >50% governance tokens;
2. Wait till all tokens are sold or when profit is attractive;
3. The whale proposes and votes for the transfer of all money from the sale of tokens (or any other income) to the whale’s account;
4. The whale gets all money, 2x profit, legally, no rules broken;
5. DAO is hacked;

Simple protection

1st, money out: DAO without accumulated money in one account, each proposal raises and spends money separately with fraud prevention protocol.
2nd, money in: money goes to members accounts directly accordingly some rules and data (stake, reputation, etc.).

Communities should be anti-fragile

Communities can’t be driven by multisig wallet that can be hacked or attacked by death DAO.
Communities must have embedded protection mechanisms that can prevent internal and external attacks.

Solution

Anti-fragile DAO protocol and framework without possibility to hack community money or compromise reputation.

Antifragility is a property of systems in which they increase in capability to thrive as a result of stressors, shocks, volatility, noise, mistakes, faults, attacks, or failures.