Official updates from major DAOs and governance proposals

Compound Finance Faces $25M Governance Attack by Titanium_32, Exposing DAO Vulnerabilities

Jul 29, 2024, 08:01 AM

A recent governance attack on Compound Finance has highlighted vulnerabilities in decentralized autonomous organizations (DAOs) and onchain governance. An attacker, known as Titanium_32, managed to grant themselves 490,000 COMP tokens, valued at $25 million, by accumulating 682,000 COMP to push the vote through. This incident underscores the need for more sophisticated DAO designs, such as veto committees and governance minimization strategies. The attack has sparked discussions on the effectiveness of current governance structures and the importance of accruing value to governance tokens to prevent holder apathy and governance attacks. Various experts have suggested solutions, including dual/multi-token voting systems and implementing check-and-balance mechanisms like those in zkSync. Penumbra's approach of having a top-level parameter to freeze/unfreeze the community pool has also been noted as a risk-limiting measure. The incident serves as a reminder for DAOs to ensure robust governance safeguards are in place to mitigate such risks.