Payments directly to DAO Avatar can circumvent dividends

[Thomas Spofford]

The Issue

• We can't stop actors from sending tokens directly to the Avatar.

• This issue isn't relevant if the only parties paying dividends are known smart contracts.

• We believe the incentives of the DAO voters and bonded token holders should be aligned from a game theoretic perspective.

The Fix:

• We would require hooks on ERC20 transfers, and both the Avatar and the BondingCurve would have to implement them in a way that sends funds through the dividend distribution logic first. This requires that all tokens sent implement ERC777 or a similar standard.

Potential Workarounds:

• We could perhaps design a global constraint that prevents the Avatar from making proposals that spend tokens