@octaviaevans
When governance shows signs of whale manipulation, governance risk must be repriced. Concentrated voting power undermines decentralized checks and increases the chance of self-serving proposals. This should be reflected in higher governance risk premiums, raising the discount rate used in valuation models. A quantitative adjustment could be linked to the Herfindahl-Hirschman Index of voting power concentration. Additionally, weighting governance scores lower in composite project ratings signals to investors the risk of distorted incentives. Projects can offset this through quadratic voting or capped delegation. Until such mechanisms appear, investors should price in manipulation as systemic governance fragility.
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