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Ungovernable Podcast Ep. 14 – Alex Netto
Recorded: April 17, 2025 Duration: 1:05:22Space Recording
Full Transcription
Thank you. Music Thank you. Thank you. Music Thank you. Thank you. Join the ungovernables.
No filters, no apologies.
This season we're cracking open Uniswap governance.
Welcome to a new episode of the Ungovernable Podcast.
Hello, hello, hello. Welcome to a new episode of the Ungovernable Podcast.
Today, we are joined with Alex Netto. There he is, a security pioneer
detecting governance attacks before they happen. Alex is the founder of Blockful,
company protecting major DAOs like Uniswap, ENS, Arbitrum, many others against exploits.
We are Joe and Austin from Alpha Growth, your premier DeFi operations and growth firm.
Alex, thank you for being here.
What else should everybody know about you?
Thank you, thanks for the invite.
Yeah, a developer passionate about governance
and super excited to be here.
I'm looking forward for our chat about the challenges
around governance security and
yeah let's get into it that okay i i just have to say you uh you won a math olympiad medal at 13
and a nasa hackathon i feel like those you should have started out with those things that's what
else everybody should know about you you're very humble but tell us a little bit yeah we did our research yeah that's great that's
fun um yeah i mean that that was the beginning of how i got into coding and programming because i'm
i'm like a really passionate guy about math and logic and so since early days this was uh my
So since early days, this was how I had fun doing math, basically.
And yeah, that's...
And so two medal Olympics and then computer science.
And then I drop out computer science to start Blockful as well.
So yeah, thanks.
That caught me off
how do you how would you say all of that has has shaped how you how you view the world and
solving problems especially in the complexity of of blockchain and governance um
i think like i i was always passionate about math math and then like finance as well and so blockchain
it's the space where you you find a bit of like economics and coding and it's like a really fun
intersection and then you also have this social layer of governance in the blockchain itself and also in the protocols
and so when navigating through the ecosystem i think i found myself really on the governance
space because then you have this really cool intersection about like social economics and mathematics and yeah i do think it was
really great to have like math and coding skills to understand some of like incentives
design mechanisms so i i think it's it's actually like a skill that guided my my journey a lot
It's actually like a skill that guided my journey a lot.
Was there a specific moment that you can point to or remember that showed you that governance is more than just like a Reddit forum page of comments and actually going to be integral into the future of the global financial infrastructure?
infrastructure? I mean, just if you compare, like how non-transparent today organizations
can be and like, they always present a more transparent way in some sense, but in others it's also sometimes just like a telegram group um and so it depends on on on
on what aspects of an organization you are you're looking but definitely dows have upgrades compared
to traditional organizations so when when i realize it um how cool is it to build a company or like an organization in the open
where you have everything transparent from like cash flow to the protocol itself to the
shareholders and even like a much simpler way to kind of like do an IPO, right?
Make your company public. And's it's super cool and
interesting for me and uh this mixture between these advantages plus having like a opener
community or like easy to easier to contribute structure um that's that's That's really interesting for me.
That's the building in public.
I think DAO's kind of started it,
and now you start to see,
and I know folks have done this for a long time,
but like Peter Lovells, for example,
I think is a good one.
That's not just Web3 related,
but you start to build a collective community.
One thing that we saw was you're a cultivator of good habits
and relationships.
What's the one piece of advice you'd give to folks
around nurturing beneficial habits as well
as cultivating those relationships?
Wow, you guys did your research. Really good questions.
So I think this is like a daily decision, you know, like what you're going to do with
your energy, with your time.
And so I imagine one example is um good habits right and so
you can imagine like your body or your your your time like going with the you have like a really
good car you have like a ferrari right and and then you you put like a bad fuel. So over time, you are having like bad performance.
You're making your car worse and worse.
And so I think in the same way about what you read, what you put inside your head as like knowledge, uh in in the in the in your approach to the
to time allocation to habits and so i i really consider um this to be super important uh for
if you wanna be on like a high level of performance and and and so that that's my goal be surrounded by people who
think in the same way and do think in a purposeful way as well and so this is kind of like my mindset
about team team building partnerships like who we work with how how we work um as well um so having excellence and and proposals it's it's probably in
the dna of of my my mindset i'm gonna ask a little bit of a cliche type of question around um one of
the things that you just you first said really resonated is like what are you spending your time
on what are you spending your energy on i think are you spending your energy on? I think in general, especially growing up in America, you know, teachers and
parents, they tell us to follow our dreams. And they say like, do things with purpose,
you know, follow your dreams, do what made, you know, what to you, what is that? How are we
supposed to find our dreams? How are we supposed to figure out? It's one thing to say, oh, I can
spend my time doing this. I can spend my energy energy doing this but how do you know if you're doing the right thing and how do you what would you give your
advice that you're pretty visionary in a lot of these a lot of these ways so i want to know from
you what how you would how you'd recommend to somebody to find the right thing to spend their
time and energy doing um i i will give a cliche answer which is do what you feel happy about.
Because you will perform really well in what you do with pleasure, what you feel fulfilled about.
feel fulfilled about um so i think that that will be my biggest piece of advice like following with
a lot of courage what you're happy about and you what you feel about really well um
because in the end we all know we all have that intuition we will we all have a voice
of like yes like i i think that's the way but man i will like quit my job i will um i don't know
drop out i will probably um not match some expectations that some people have around me
um but it's kind of like this intuition of like following your dreams or like what makes you truly happy.
And I think that turns out to pay really well.
Maybe one other insight is I don't want to have regret when I look back.
I don't want to say to myself like, oh, what if I did this thing?
Like, where will they be so i i
try to not have regrets in the in the future yeah see the opportunity i think it goes back
to the car analogy too right is it is it fueling you or is it slowing you down i think that's a great way to look at it
so for maybe to to move on alex to like block full um for listeners that aren't familiar
about what block full does would love to uh to hear the the tldr from you
So Blockflow began like two years and a half ago.
We started as a dev shop, but that was just a way for us to bootstrap the company and
like get more experience, capital, networking.
The idea was always to build a product. And so one year and a half ago, we started doing this switch and testing different products.
And then we got more involved in governance because we allocated part of our treasury
into UNS.
And then we got like truly like skin on game and involved in the governance.
And then the community
delegated some tokens to us and then out of nothing, we became like top delegates on UNS.
And so
that's how we got more involved within governance.
And since we were already looking for products to do then we started
more and more like um niching the projects right and so creating governance uh like new governance
mechanisms um until we got the in the scenario inside dns that was identifying a risk and so
today what we do is preventing governance attacks right like that that's that's our main goal our
goal is to make dows safer um and you can think about different different angles you can approach this problem.
And so we will pass through each of those angles more in the podcast.
But yeah, a big goal is making DAOs safer and preventing governance attacks.
So you guys use this concept of anti-capture framework.
Did you invent this? Did you invent invent this term is this a new concept
um I don't think it's a new concept like a new term I remember to see some articles with
like a similar uh nomenclature I think like there is one from Spencer from like HATS protocol as well.
But it's definitely a different approach.
Can you explain a little bit the history and the key elements of this concept of anti?
So anti-caure from our perspective and how we built it was researching more than 30 DAOs attacks
and understanding what were the common things on these DAOs, these attacks,
and what could we turn into parameters to identify the vulnerability in new DAOs?
And so creating this framework to then analyze a new DAO and assess the risk of an attack to happen in this DAO.
So it is effectively giving you an understanding of what is the anti-capture resistance that DAO has. So that's kind of like
the story of how this anti-capture framework was created. Now I cannot tell you exactly about the
anti-capture framework definition from Spence because it's been a while i don't read uh this article um but our approach is
it's more technical i would say it's more like specific um maybe more practical in some sense
in in layman's terms for for someone who's who's not uh who doesn't have three extra brains
what uh what do you think is the minimum
that someone needs to understand about this concept
and how does it relate to protecting a DAO?
So the framework analyzes the DAO in three aspects.
The first one is economic conditions.
So one quick example is what's the price of the token?
What's the amount of tokens that you need to pass a proposal?
And this gives you a value.
And then you can compare this to the liquid treasury, which means what is the treasury
that the DAO has that is not in the governance token so this gives you a good
comparison to understand if it is profitable to just buy tokens enough to pass a proposal and like
raid the treasury and so that that's one attack factor or like one reason to buy
or like one reason to buy uh it's one clear one clear reason to to attack a dow
and one example of that is we recently saved a dow that you needed to buy 150k to get uh five million dollars like liquid oh wow and so yeah and so but this was not just because of the economic
condition but also because of the second part the framework which is governance implementation so
this is the second vertical we analyze which is understanding how the governance is structured
is understanding how the governance is structured.
What are the rules and validations on the governor, on the timeline?
And how are the front ends implemented?
Is it easy for the user to vote?
Like, how is the capability of responding to an attack?
So it's really analyzing the stack of the governance and there are a lot of validations
and rules that sometimes some protocols don't have and make them more exposed to to the economic
conditions um so that's like the second vertical and then the third vertical is governance activity
right and so you have the tokens you have voters how much they vote how
many tokens are delegated like what is the activity in numbers around governance and that gives you a
much better sense of how effective the community could defend an attack and so these are the three
scenarios like economic conditions, governance implementations,
and the activity that is happening on governance. And that's kind of like how I can give you
like a big vision of how the anti-capture framework works.
Is there any like rules of thumb for either of those three you could give advice to like
folks or DAOs for to prevent some of those three you could give advice like folks or dows for to to prevent some of those
attacks um well first one is keeping your eyes really close to the value of all the legated tokens or like the value of all the tokens usually used on
on the voting versus the liquid treasury i think like this is like a really basic one and um
there is not a lot of dows that go into this scenario because liquid treasury it's like
something rare sometimes right like dows usually have most of their treasuries in the governance token itself.
So a lot of DAOs are protected against this type of attack naturally,
because if you attack the DAO, the governance token will like go down.
And also if the attacker wants to sell the governance token will like go down and also if the attacker wants to sell the governance token
they just don't have like liquidity enough or um it just doesn't make sense in that specific
scenario so for those that have that do have revenue that do have a treasury that is not in the
uh treasury that is not in the the the governance token you definitely should look into this this
metric um and yeah there are some other quite interesting things around governance implementation
that you can do for for preventing um attacks as well uh and it can vary a lot from DAO to DAO, because as you guys know, like DAOs had quite different governance implementations and like specific context.
So there is not one model that fits all.
It's rather like a specific analysis of the context.
better like a specific analysis of the of the complex do you keep any of this information
out in public for people to see you guys as a thought leader around governance attack prevention
is there anything is there a place that you have indexed and calculated all of this information
for these different dows to where I could go on if I'm a member of ABC DAO, I could go in there and see that,
oh, this is how much it would cost for a governance attack.
That's scary.
And then you guys have a score between zero and 100
based on how vulnerable it is.
I think that would be a great way to market here
what you guys are doing as well.
Yeah, it's 100%.
So Blockful today is mostly like uh was like a lab because
like we we are building uh we build different products throughout uh our our journey and
the product we are 100 focused right now is anti-capture so anti-capture we have been building that for the last uh seven months and it's basically
an alphabet for for depth or like dow security so you can imagine it is exactly like out to
beats where you have stages and you have the reasons uh why they are in the stage you have
like a risk assessment for each of the areas of the DAO
and you can access that on anticapture.com or follow this on Twitter as well, at anti-capture
and that's the place where we are consolidating the research and risk assessment for each one of the DAOs that we are
making the research and so today we have Uniswap and ENS. Optimism will be the next one integrated and we are looking forward to like
have more DAOs on board, expand this and really speed up our impact in the ecosystem to make DAOs safer because that's our goal.
And then we don't want attackers if like north korean knew about this cns situation or knew about this
other daoi just recently saved it right it's like a no-brainer attack right like 150 uh k
to get like five minutes it's like it's like no-brainer attack for someone with bad intentions
So it's like no brainer attack for someone with bad intentions.
So that's what we exactly don't want to.
I suppose that is
that is kind of the caveat of you guys marketing
some of this stuff, right?
If you if you put the list out of like here are the top ten most vulnerable
DAOs and here's why you should hire Blockful at the same time,
you're advertising where the pirates should go and rate. Right. is that is a little bit of a double-edged sword
100 i i think this is our biggest challenge right now like how to sell it in the right way
because um sometimes people don't recognize like they don't understand how much of a risk it actually is
um you have something we learn is that you have a lot of the normalist bias around
governance attack so the normalcy bias is basically a cognitive bias that says um
that says, oh, if it didn't happen to me, it will not happen, right?
And so people have this really, really strong governance attack.
And then we also don't want to expose the data to, like, make it public for attackers.
So I think this is one of our current challenges in scaling it
and onboarding new DAOs in a sustainable way.
Yeah, I always feel like it's kind of like cybersecurity as well for like a traditional Web2 company.
You don't need it until you need it.
And then you wish you had it.
So it's hard to go backwards until you've experienced that pain.
Yeah, correct.
It's almost like an education work with the community.
Because people today are really aware about smart contract security, right?
They do it everywhere.
So that's a new type of security we are developing here.
And it's also quite needed.
So you remember that I mentioned that we researched
more than 30 DAO attacks?
Like if you sum all the values until now that were attacked,
it was more than 400 million dollars right and so if if
this what we are doing right now existed before we could have prevented nearly like all of them
and what we prevented until now was a hundred and more than 150 million which was like the ns plus this other yeah which is not
public because it's it is safe but we need not yet that's okay it's a little needs a little work
all right all right alex question about a question about the the relationship between the governance
token and the dow itself i think this is one. I think this is one of the most, this is one of the largest points of
contention, depending on which DAO you're talking to and which delegate you're talking to. But I
have this perspective that if you financialize the governance token and a downstream effect of
that financialization is that the token price will rise.
If token price rises, all else equal, it costs a lot more money to real dollars.
It costs more real dollars to take over a DAO and to change anything.
And so in my opinion, because of that assumption, I think that financializing your governance
token is actually a protection mechanism against governance attacks.
So in this example you shared where you guys, someone could have used $150,000 of a governance
token to essentially gain control and take over these $5 million of funds in the treasury,
that could have been prevented by a more expensive
governance token right so i think there's that's that to me is the main main argument do you agree
with that do you disagree with that how have you seen that opinion play out i agree um it's
definitely it it creates like a bigger bigger barrier for attackers, and that's good.
I think the only question I have around it is for DAOs that don't have revenue. is like the governance tokens and the way they can incentivize or financialize the token is
basically distributing uh from the doubt treasury to token holders and then eventually i don't know
in some years they will not have tokens in the doubt treasury anymore maybe that's that's not
necessarily what i mean by financialize i more so mean an emphasis on DeFi utility, DeFi optionality for the token itself.
So, you know, right now, if you think about going to a casino where you give dollars and they give you chips and then you walk onto the casino floor and there's no games to play, there's no slot machines, there's no roulette, there's no table games. There's no Baccarat.
There's nothing, right? You're not going to really care much about these chips. They don't
have any interest. They don't have any real value to you because you can't do anything with them.
So by financializing, I more so mean having some sort of emphasis on giving utility and optionality
to the token itself. So putting this governance token into all the different categories of DeFi,
right? Money markets, can I mint a stable coin against it? Can I borrow against it?
Can I trade perps on it? Can I, you know, all the different things you could possibly do in DeFi.
If you get your governance token everywhere in DeFi, it's going to have more demand and a
downstream effect of demand is that in a perfect world,
the price goes up and more people want it, more people value it.
That's more so what I mean.
I don't necessarily mean just omitting tokens at infinitum to convince people to hold on to the token.
I'm more so mean giving it real utility in the ecosystem.
Got it.
Yeah, I definitely see this like being really benefic, but it's also a question too, is it enough? Because a lot of the larger DAOs that have a lot of utility in their tokens sometimes also suffer with with this and so maybe this is this is like the minimum you should do and it's
really good like already helps a lot i can see a big difference between tokens that are only
used inside the governance and tokens that have much more utility on the like defi ecosystem for example being a collateral on a big
landing market that makes like huge huge difference um and so yes this this in my
view should be like the minimum if if you want to make a larger dow um but then still being on a larger DAO, it's common to see that maybe you need even more incentives to create meaningful numbers.
And so this is a big challenge right now in governance, which is raising the delegation in a meaningful way because you just
you don't want to just throw delegations in like everyone right you you don't you don't want
completely strangers to be ruling your organization right you're like your community and so
how to meaningful meaningfully increase delegation um to secure
the DAO that that's like a big big challenge and also without capturing right because um
you can that's another topic we don't cover so much because it's harder to to to get data around so what we mostly what mostly research and can understand with the
anti-capture framework is capture from outside not from inside right so the capture from inside
which is collusion between delegates service providers and and that that's something you can
see and perceive in some ecosystems that that's much
harder to capture because it's it's more like the social layer than some type of like metric you can
get so that's that's one cool inside maybe of like what other folks can can can work about
anti-capture but the capture from inside.
Yeah, so it's almost like insider collusion, an insider attack.
And I guess, Alex, what are some of the most historical governance attacks that happen?
and maybe how they could have been prevented.
And maybe how they could have been prevented?
So the biggest one was Beanstalk protocol,
which was a stablecoin protocol.
They got hacked for 180 million.
So it was like the biggest by far.
And it was like such a simple attack it was a flash loan attack um so the only
thing they needed to do is to change their governance implementation to to not support
proposing and voting uh with with like flash loan delegation uh so it's it's basically like a one line of code you
you need to change to to just like look at the delegation in the past block and not in the
current block so people couldn't use flash loans for for governance um So that was their big mistake. And it cost them the whole protocol.
Yeah. So this is the biggest one. And it was caused by the code level, right? Like
by the code level right like a wrong governance implementation and another big example I think is
Aragon right so Aragon it it was just about like token power so it was there was even a hedge fund that was buying tokens and they kind of like
attacked Aragon just by buying tokens, literally.
So it's crazy to see that hedge funds, they are down to do these kinds of
operations.
And at the time, Aragon had something like $100 million in treasury because they fundraised in the ICO when Ether was much lower.
And at the time, Aragon had something like a hundred million dollars in treasury
And then Ether just like went up really high compared to 2017, 2018.
And so out of nothing, they had like so much money compared to the governance token and and it
got attractive to a hedge fund um so that's another big example um which ended up costing them
i think like 70 of the treasury something like that like they they got like it got distributed
among token holders something something like that.
Yeah, that's another big example.
So did the hedge fund essentially get custody of those tokens or be able to send those out to all the Aragon token holders
so that way they would capture more than anyone else
once they bought all those tokens?
I don't remember the exact history right now, but they even feel like a lawsuit or maybe
like the Aragon Foundation, they had something like a veto and then every token holders got
really pissed about it in a level where they feel like they killed the lawsuits. And so it was like a hectic moment for sure for
Paragon. And we have other quite interesting examples
which are not so related to the treasury, but rather to like protocol
mechanisms. Balancer Wars, it's a super interesting example,
right? So you have Humphreyumpy which is the same guy that attack
in my opinion he attacked compound and and so balancer wars was basically
humpy buying enough tokens that where he called redirect the incentives for liquidity pools to his own pools like so pools
with like strange tokens that only he was providing liquidity to or like he was the majority of the
liquidity positions and so he was exploiting the mechanism of the protocol and not the treasury itself.
But that's another motive you can attack Dallas.
I think that's a great...
Quite interesting.
I think it's a great segue into...
Hey, there's a little bit of like this philosophical, ethical, moral idea that basically i would be willing to argue
most of these governance attacks are above board they're playing by the rules right and they're
just identifying these these attack vectors that the system that we've built is not immune to and
i think as as we progress here we're going to see more and more
things that expose these vulnerabilities. And then we'll need to realize, oh, we have to redesign,
we have to turn some knobs and dials. But I want to bring up this concept of lobby-fi.
I assume you are familiar with lobby-fi. Okay, so tell everybody what lobby-fi is,
and then give us your your spicy opinion of lobby fi
and where it stands in your your moral spectrum yeah um i like lobby fi i think it's like a
mechanism that um should exist and in in some sense it does make uh attack what is lobbyify oh yes perfect so lobbyify it's
basically a protocol where people can delegate their tokens to a contract which is the lobby
contract and then the lobby contract uh can sell the vote so it runs like a an auction
it runs like an auction uh where people can literally buy the vote to um vote how how they
want and so they are effectively buying a vote on chain and the people who are delegating this
voting power to this contract they get they get the the revenue from this this vote that was was by uh so that's the TLDR for for Lobby 5 I think
it's like a super cool idea uh I'm so excited to see it going like expanding to to other protocols
um I like their their simple approach where you just need to like delegate you don't need to
transfer the tokens or anything it's like really really simple and and low risk i think the higher higher risk is for the daos but i honestly was expecting to
someone to do something similar um because we need more mechanisms around governance and this actually makes governance more fun and it helps to bring
more eyes to this topic which is like mechanisms and captures and like governance security
and so i'm a fan of of lobby five because you could you could imagine it um getting more and
more traction and maybe at some point the own DAOs may need to be client of
Lobbify and so they they are creating some type like they are forcing the DAO to have revenue
to token holders that delegate and increase delegation and so in the long term, I think it's really interesting.
That's such a good point.
Yeah.
So yeah, my vision is that
the DAO will be
the client of Flubbify.
Interesting.
Yeah, I'm just so excited.
Just to reiterate
how valid
your point is here.
So basically what you're saying is, let's say I have Unitoken. Just to reiterate how valid your point is here.
I think, so basically what you're saying is,
let's say I have Uniswap tokens.
We'll use Uniswap as an example, right?
Uniswap token holders in general,
I think are pretty upset just because this fee switch thing
has taken way longer than everybody wanted, right?
And whether or not the fee switch
is going to actually produce a lot of yield for the token holders,
that's a completely different conversation.
But the idea here is that Lobbify might offer
Uniswap token holders a way to earn yield
on their uni tokens.
And let's say that yield, call that beta rate 5%, right?
You can earn 5% yield by just giving your voting power
to somebody else, which could be detrimental
to the DAO. And so Uniswap DAO basically needs to say, we can step in and reward 5.1%, 6%,
whatever it is. And we will prevent you from delegating those votes away. So they need to
come in now and have a competitive rate of return
for their token holders in order to further secure
and make their patrons happier.
That's a brilliant point.
That is a perspective I never thought about for LobbyFi.
So, cause I was, at first I was wondering,
I was like, how are you in support of LobbyFi?
I feel like this is a major vulnerability,
but in reality, I think this is like a,
this is a very, very strong capital efficient democracy that is going to be created here.
Yeah, and one more point is if the DAO is not the client, they need to force themselves to raise delegation until a point where it can handle lobby-fi, right?
And this doesn't turn into into a security problem so it's like forcing
things to move forward in the same way we we are forcing like making dows more accountable
when we expose their data when we when we expose things um so i like this approach and i think someone needs to do something
um and be really honest we were even thinking to do something similar like one year ago um but i
think their approach is much simpler our approach will be doing something like a delegation market
where you will sell the delegation itself. Like, you will take the token
and you will run, like, a mechanism
to sell the delegation itself,
not selling the vote.
So it was a bit different.
I honestly, I prefer their approach,
which is much more simple and low risk
because you don't give the token,
you just give the delegation.
Like, you delegate to a contract.
So it's it's it's
more elegant and yeah like any anyways daos will need to do something and i think it will it will
be good i hope so alex for i guess for these governance vulnerabilities, I kind of think of them almost as like cybersecurity vulnerabilities or different types of attacks, right?
Like we have phishing emails that have never gone away.
You'll get those emails that Nigerian Prince is donating to you for governance attacks.
What do you think are some of those vulnerabilities that are just
never going to go away front-end vulnerabilities probably um you see that happening quite often
and now like recently it happened with safe and you see that even like the highest standards
and you see that even like the highest standards stakes organizations um they are exposed to it
because you have so many vectors like the the computers of the own team or like other external
infrastructure vectors as well and so front end i think it's a big factor and it will always will be
um users doing like wrong things using like wrong websites or like clicking strange things
getting malware and then like i don't know we could see an attack where you target the big delegates and try to pass like a malicious
proposal for example you know but this hasn't happened so far but it is like a possibility um
so yeah i think these never go away and it's it's hard for the web 2 world and the web 3 world as well yeah it's always the i feel
like the social aspect or the person aspect tends to be the weakest link and especially of any
central points of failure like big delegates or front ends that's just going to make it
much of an easier honeypot to to break into is is there any like trends that are on the rise that you've seen for governance
attacks that maybe have been done a few times but you're expecting to see more of in the future
i would not say there is a trend um because like attackers they are really creative
and and they explore different paths so you have humpy attacking compound and balancer for example
and he attacked much more he has like a style of attack you could say that you have um some hedge funds that already did some operations like buying
enough tokens to get the treasury um you also have let me see oh this one is quite interesting so
mango markets i think it was mango markets from solana um some of their governance tokens were at ftx and an investor
bought the these tokens at the lower price because ftx was like doing auctions um and so he got these
tokens from like a lower price and then he could pass a proposal to sell these tokens to the DAO itself in a higher
price. Like, look at this, like this is super creative. You got your tokens from a bankrupt
exchange auction, you know? So I don't see a clear trend. I think the trend is attacking where
is attacking where the opportunity is and so attackers will just like find this this opportunity
and and execute it what would you say are the the biggest vulnerabilities in the uniswap ecosystem
right now and how can we how can we step in early early and often um so yeah the uniswap foundation uh hired us for doing a uniswap
governance security audit um and it was super cool i think they have a really good implementation
they have really good economic conditions in our assessment uniswap is quite safe like it's really safe i would say the biggest
biggest vector will be the front end um but that like we have two front ends right
pally and agra this this does helps a lot
uh this this does helps a lot um but other than that was super safe like they have really good
implement like governor implementation so it was really really impressive to see i think if something
bad were to ever happen and there was some some governance attack with just Uniswap tokens,
if that ever were to come to be.
I think with the most recent proposal that the Uniswap Foundation got pushed through,
I think they have more Uniswap tokens than probably any other party, right?
I would assume maybe one of the early investors in Uniswap has more,
but they now have a tremendous amount of voting power potentially if they were to delegate to a specific good actor to prevent
something happening is that is that a fair way of thinking about that or am i off base there
um refresh me i i don't remember now how it was like 125 it was like 125 million dollars
that guy okay that got pushed through for for uni swap unleashed
and so and that was in community okay okay yeah um i think this is still far from paradigm right
like there are larger vcs who control the larger part of the the supply right so i get i guess so
i i'm i'm not entirely well versed in the in the
VCs and what their holdings are but I guess I was just thinking in terms of just the dollar value I
don't think there's a lot of bad actors that have that much liquidity that would be able to obtain
that much uni on the open market without anybody noticing yes without anyone noticing that that's definitely true um so if you were aggressive like the the
amount of tokens the amount of capital you need to pass a proposal on the unisop is like more
than one bit so it's like is it that much yes i can't 40 i mean what's what's 40 million times
40 million times uni's token price if if you go to anti-capture.com you can see some of those metrics
and okay the delegated supply is one billion the active supply it's uh 430 million the active
supply basically gives you a number of um how how much tokens,
like how many voting power all the voters that were active
in the last 90 days have right now, right?
And so all the voters that were active
in the last 90 days,
if they voted right now,
how much will it be?
So it's like a really good metric
to understanding like the response,
how many capital can we we defend and it's like 400 million so that's a lot yeah no it's it's
it's pretty wild yeah if uni if uni token was ten dollars it takes 40 million to get a proposal
pushed through so that's that's for 400 million dollars of of economic force to get a Uniswap proposal pushed through.
That is pretty impressive.
It really is.
Okay.
If you were to redesign from scratch Uniswap DAO, the governance model, the structure of it,
what are some of your...
You can be as spicy as
you choose here this is a safe space what would you say uh should be different
i'll tell um more um
like nice per like this purse token allocation like less vc allocation probably like
in the end what i would like to change is like token voting governance how so
I think token voting makes things really political, but that's also a question, like a philosophical question.
Maybe that's like the human nature.
experimentation around
merit-based
reputation-based governance
or something
more towards
contribution and evaluation
rather than
just capital, some type
of multiplier.
I don't know.
It's also possible to game and it's
also vulnerable to politics
but definitely less.
It's just not about capital.
And I think that's that changed a lot of things.
So lots of you see more experiments around like larger DAOs adopting more than token
governance. than than token governance maybe optimism does this with like the the uh that that's i forgot
the name but the guys who votes on the the retro pgf i forgot their names but yeah you've seen any
any daos or governance structures that are more meritocratic and and what does that look like because i personally have not i think
all of these unfortunately they get wildly corrupt they get wildly political and that's just
power flows in that direction money follows power power follows. It's just this vicious cycle that I don't know if humans can ever break away from when,
depending on, you know, pretty much everywhere in the world that's
beyond Maslow's hierarchy of needs.
I think money is pretty much the number one thing that people care most about.
And therefore, I think it starts to, tends to corrupt.
So I would please, by all means, if there's anything more meritocratic
that we can follow, I'm more than more than open to, to trying that out and experimenting
on different governance models.
Yeah, I think it's, it's really part of the human nature, as you mentioned, I'm super
excited to see the future key experiment. That's definitely something that has been around.
It looks like another exciting option to gather preference and, like, decision making.
So excited about that.
There was one thing about to say about the UNISOF governance.
Shit, forgot.
Oh, it's all good, Alex.
We actually had a question from the audience asking about the petition feature.
Do you know a little bit more about that?
Oh, cool. do you know a little bit more about that oh cool um yeah so that's a way that the community can
basically support the support the product expressing their their um so basically arbitram
right arbitram we didn't index them yet and it's a way you can basically sign, like snapshot,
like do an option signature to express your support
and show like, hey, support this like anti-capture
to integrate Arbitrum.
So if you are like a delegate in an ecosystem
or want like anti-capture to have new DAO,
then you can express this
on anti capture.com basically so yeah this is pretty cool thing for
understanding the the community and like the interest about the data and for
raising the security of the DAO I'm still trying to remember the comment I will do about Uniswap governance.
Here is a question that might help you remember.
If a magical unicorn delegated you 41 million votes,
in votes what is the first thing that you would do in uniswap
what is the first thing that you would do in Uniswap?
you you almost got it ah you almost you almost got it the the the the thought back um
oh that's a good question. Maybe Unistaker.
I don't know.
Tell us a little bit more about that because there's a lot of, I think we've heard a lot of really, really neat opinions and perspectives around Unistaker.
So where do you see in a perfect world what does the staking mechanism look like?
There is a small...
So Unistaker is basically the mechanism where you stake the token and you delegate it to
someone and then you get access to the yield that comes the uh uniswap v3 uh pools they have
they have a configuration you can set a fee and then unistaker like this proposal that is around
for for a while it's basically proposing that you set this fee from zero to, I think, like five or like 10%, something like that.
And then you collect fees to distribute
among these stakers that are staking tokens and delegating.
So like one small change I will do
is only give tokens to people who delegate to active tokens.
But that's something really hard to know.
Like, how do you measure?
How do you know, like, who is an active voter?
Like, what is an active voter?
You know, so that's like a subjective definition.
But it's something I would like to see
because it's much more meaningful than just, like, delegating tokens.
And then the voter is not even active.
So you're not, like, increasing the security then the voter is not even active so you're not like increasing
the security of the dow but you're definitely making some mechanism to um
that is better for the token for like the token price it helps governance security as well um
and it brings more strength to the uni token I'm super excited to see more revenue share coming
to to you and so we have also like the front end fee um that will be super super interesting to
see that uh going to the DAO as well um so definitely interested to see and understand the outcomes of Unistaker.
I think the biggest barrier is the regulatory one, right?
Yeah, that's still a big question mark for sure.
But I'm bullish.
I think there's going to be a lot of interesting conclusions that come in the next, definitely six months.
I think probably even quicker than that, we'll have some closure.
Alex, as we wrap things up here, where can everybody keep track of all of your
interesting insights and the progress of Blockful and also best practices for governance safety?
Yeah, please follow at Ant capture at twitter is where we are posting
all the dates around the research the product um our team is working really really hard and like
we are shipping new features and improving them like each week so we will super appreciate any feedback about the product as well.
You can find it on anti-capture.com.
And I think these are the best resources we have.
And it's where we'll post all the updates.
And when I remember the thought about the UnisHub governance,
I will post it on Twitter and let you guys know because it's like...
We'll retweet it. Absolutely.
Yeah.
That sounds great.
Well, awesome, dude. Awesome conversation.
That's a wrap of another episode of the Ungovernable podcast.
Alex, thank you for your perspectives.
I think a lot of us take these for granted.
For our listeners, don't forget to subscribe on YouTube, Spotify.
We're dropping new episodes every week with awesome guests like Alex.
Follow us on X at Grow Uniswap.
And that was the Ungovernable podcast.
We are Joe and Austin from Alpha Growth.
See everybody next week.
Thanks, Alex.
Thank you, Joe.
Thank you, Austin. See everybody next week. Thanks, Alex. Thank you, Joe. Thank you, Austin.
See ya.
This was the Ungovernable Podcast by Alpha Growth.
Watch all our episodes on YouTube or Spotify
or weekly live on X.
