Part 1- Understanding Research Goals
- Determine the current vulnerability of the Arbitrum DAO to governance attacks.
- Evaluate the risks associated with reducing the current quorum.
- Propose potential solutions and mitigation strategies to enhance DAO security.
- Discuss with delegates what are their concerns with current set up? What types of attacks they are concerned with? What is the current treatment of ARB held in DeFi protocols?
- What can be the role of the Security Council?
Part 2- Identify Potential Governance Attacks
- Research historical attacks on other protocols (notably compound and recent MakerDao) how were they achieved. Can they be reproduced in the current Arbitrum governance Framwork.
- Understand the current arbitrum governance framework and ARB staking.
- What are the various types of proposals than can be put forward and their potential impact on the DAO?
- Identify potential attack vectors and their impact on the DAO and potential profit from those attacks
- How does LobbyFi/rise of agence governance becoming the largest delegate impact the potential for governance attacks? With their voting weight of 0.20%, what share of voting power do they hold based on average vote participation? Investigate other bribing mechanism in other chains/protocols.
- How do other protocols/chains deal with similar issues? Can we learn from these initiatives?
Part 3- On-Chain Data Analysis
- How is the current voting power split?
- how much is owned by each delegate?
- Karma Score and activity of each delegate.
- token ownership of ARB token where is it spread, holding period.
- Evolution of ARB ownership and how much is being sold, the effects of upcoming token unlocks on ARB distribution.
- understand the incentives for voting for a proposal and how this impacts the risk of an attack. Some delegates or token holders might be encouraged to vote just for the reward
- Historical voter turnout- check if this has improved with the introduction of ARB staking rewards. How is the voter turnout influenced by type of proposal and its size?
- ARB DeFi integration : how much ARB can be borrowed, shorted on CeXes, restaked or liquidated. Understand the cost of carrying an attack i.e. funding rate, borrowing rate, bribes, liquidity, slippage.
Part 4- Modelling