✅ Master On-Chain Governance
Understand protocol upgrades, voting mechanisms, and attack vectors
Upgrade blockchain protocol through voting
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You've explored on-chain governance mechanisms, proposal lifecycles, voting systems, and security vulnerabilities. Let's review the essential concepts before testing your knowledge.
🗳️ On-chain Governance Fundamentals
Decentralized protocols enable token holders to control protocol evolution through smart contract-enforced voting.
- •Proposals executed automatically once approved—no trusted intermediaries
- •Used by major DeFi protocols: Compound, Uniswap, Aave, MakerDAO
- •Enables parameter changes, upgrades, treasury management without hard forks
📋 Proposal Lifecycle (5 Stages)
Structured process from creation to execution with multiple security checkpoints:
- •Pending: Voting delay period after creation (typically 1 block)
- •Active: 3-7 day voting period, power snapshot at creation block
- •Succeeded: Quorum met, majority voted FOR, ready for queuing
- •Queued: 1-7 day timelock delay before execution (exit window)
- •Executed: Changes applied to protocol contracts automatically
🔢 Voting Mechanisms
Different systems balance plutocracy, sybil resistance, and voter participation:
- •Token-Weighted: 1 token = 1 vote. Simple but vulnerable to whale control (Compound, Uniswap)
- •Quadratic: Vote power = √tokens. Reduces whale influence, lowers sybil resistance (Gitcoin)
- •Conviction: Lock tokens longer for more power. Aligns with long-term health (Polkadot)
- •Delegated: Assign voting power to representatives, combats apathy (ENS, Optimism)
⚡ Governance Attacks & Defenses
Attack vectors and critical defense mechanisms:
- •Flash Loan Attacks: Borrow tokens, vote, repay same transaction → Defense: Snapshot voting power at creation
- •Vote Buying: Accumulate tokens to control decisions → Defense: High quorum, timelocks, delegation
- •Bribery Markets: Pay holders to vote specific way → Defense: Conviction voting, veto power
- •Critical Defenses: Timelocks (exit window), snapshot blocks (prevent flash loans), high quorum (expensive attacks)
💡 Best Practices
Lessons from production governance systems:
- •Always use timelocks: Minimum 24-48 hours, ideally 7 days for major changes
- •Snapshot at creation: Record voting power when proposal created, not during vote
- •Balance quorum: 30-40% participation prevents attacks without gridlock
- •Consider delegation: Combats voter apathy, distributes power to active participants
- •Emergency veto: Security multisig as last resort against attacks (centralization tradeoff)