The passage of Proposal 289 by the Compound community highlights severe issues of voter apathy in decentralized governance, allowing a small fraction of token holders to exploit governance loopholes.
Despite having a Nakamoto coefficient of 17 and appearing decentralized, CompoundDAO’s ability to pass Proposal 289 with less than 7% of the total COMP supply underscores the hidden challenges of true decentralization.
Current decentralization metrics like the Nakamoto Coefficient focus solely on token distributions, failing to consider the actual control behind token wallets, which can drastically misrepresent a DAO's decentralization.
The situation surrounding Proposal 289 emphasizes that even DAOs perceived as decentralized can fall prey to governance attacks if community engagement and voter participation remain critically low.
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