The treasury of Solana-based memecoin project, BONK ($0.00 · Live), has been drained of over $21 million, via a malicious governance proposal.
A single address, accounting for 882 billion BONK, voted in favor — just enough to reach quorum.
Apparent disinterest from other holders led to just six other voters, and the proposal passed with 99.9% of votes in favor.
The proposal, BIP 76, was submitted on June 30 and ostensibly aimed to implement a new “Sowellian” governance model.
However, the camouflage was somewhat lacking in sophistication, with just two proposed actions: “Add Metadata,” and “Send 4.426.104.450.305 Bonk to 9bxWkN…”.
Blockchain forensics firm Chainalysis traced the “days-long BONK spree” which saw one wallet acquire $8 million worth of tokens “on mainstream exchange[s] and borrowed via DeFi.”
By Monday, the address had enough tokens to pass the proposal and made its move on the final day of the voting period. The 4.4 trillion BONK tokens were transferred once voting ended.
Chainalysis explains the majority of funds were transferred to a multisig, which appears to be a new BONK 2.0 DAO. The tokens acquired for voting are being liquidated.
Read more: DeFi platform Summer Finance loses $6M in vault exploit
Governance ‘attack’ or voter apathy?
Draining a DAO treasury of $20 million may sound a lot like an attack but, with such a straightforward and poorly-disguised proposal sitting in an open governance voting forum for a week, the incident also clearly demonstrates a lack of interest from token holders.
Crypto security expert Taylor Monahan examined the “pretty subjective and loosely defined” definition of a governance attack. The community’s “gut reaction” suggests so, she believes, but whether or not it would constitute wire fraud is another question.
Conversely, a pseudonymous advisor to World Liberty Financial, Ogle, simply asked “isn’t this just a functioning DAO?”
Read more: WLFI ($0.06 · Live) token falls 18% as governance vote branded a ‘scam’
Perhaps expecting rigorous governance oversight from a community of dog-themed memecoin holders is asking too much.
Despite once being seen as DeFi’s answer to hierarchical corporate governance, the wider DAO governance dream has been struggling lately.
In recent months, turbulence has come for some of the sector’s most well-established examples, including the Ethereum Name Service, Aave, Gnosis and more.
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