Build Finance DAO Is Under New Governance After Takeover

Build Finance DAO is now under new governance after someone passed a proposal to take over the project so let’s find out more today in our latest cryptocurrency news.

Build Finance DAO is now looking for a way forward as it was only a matter of time before corporate-like takeovers went on-chain. Build Finance became the first DAO to fall victim to this phenomenon:

“The Build Finance DAO has been the target of a hostile governance takeover in which a malicious actor has put forward and succeeded with a proposal to take control of the Build token contract.”

Build Finance billed itself as a venture-style proejct that is built on Ethereum and sought incentive for the rise of new crypto projects via its BUILD token by overseeing funding, hiring processes, or managing a project’s progress. One example of the Dao labors was the launch of the Metric Exchange which is a DEX aggregator but now Build Finance is under new management. Just like traditional corporations, decentralized autonomous organizations are subject to the whims of their stakeholders who can use their token holdings and make proposals for how the organization should pursue internal projects and how the treasury should be spent.

The attacker was able to access funds in this way due to the structure of the Build DAO governance model. It is believed that the attacker took extra steps to stop evidence of their activities by way of disabling the gitbooks and the proposal bot. 8/18

— BuildFinance (@finance_build) February 14, 2022

In the case of Build Finance, one individual was able to pass a proposal that handed over the token contract which is a smart contract that gives the owners free rein to create or to destroy as many tokens as they want. They took control of the project’s minting key and governance contract. Nathan Van Der Heyden who is the head of growth at Snapshot Labs said:

“By definition, a hostile takeover happens when a company takes control of another company’s management against the wishes of said company’s current management. However, in DAOs, the management doesn’t lie in the hands of the founding team but is rather decentralized amongst all tokenholders.”

The individual was able to pass an advantageous proposal because they enjoyed an outsized number of tokens which are used to vote on these sorts of things and there was very little attention made around the proposal:

“Interestingly enough, blockchain architecture allows us to follow play-by-play how the takeover took place, and we can see the ‘attacker’ deployed considerable capital in the takeover.”

We would welcome a discussion in the discord with community members about the way to move forward from this but it is difficult to see a future for BUILD with only its brand recognition and IP assets, and no liquid treasury. 16/18

— BuildFinance (@finance_build) February 14, 2022

The Build finance team indicated that the lack of attention around the proposal was because one individual took steps to stop evidence of activities by disabling the gitbooks and the proposal bot. With the proposal now being passed, the total control over the project is lost as the individual went to work minting and selling tons of tokens. The individual was also able to pillage Build Finance’s treasury and sell 130,000 METIC tokens.

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• Source: https://www.dcforecasts.com/altcoin-news/build-finance-dao-is-under-new-governance-after-takeover/