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What are Decentralised Autonomous Organizations (DAOs)?

A Decentralised Autonomous Organisation or a DAO, is a unique take on democracy on the blockchain. It is a set of rules encoded into a self-executing contract (also known as a smart contract) that operates autonomously on a blockchain system. A DAO imitates a traditional company, although, in its more literal sense, it is a contractually created entity. In theory, DAOs have no centralised authority in making decisions for the system; it is a communally run system whereby all decisions (be it for internal governance or for the development of the blockchain system) are voted upon by the community members. DAOs are primarily characterised by a decentralised form of operation, where there is no one entity, group or individual running the system. They are self-sustaining entities, having their own currency, economy and even governance, that do not depend on a group of individuals to operate. Blockchain systems, especially DAOs are characterised by pure autonomy created to evade external coercion or manipulation from sovereign powers. DAOs follow a mutually created, agreed set of rules created by the community, that dictates all actions, activities, and participation in the system’s governance. There may also be provisions that regulate the decision-making power of the community.

Ethereum’s DAO’s White Paper described DAO as “The first implementation of a [DAO Entity] code to automate organisational governance and decision making.” Can be used by individuals working together collaboratively outside of a traditional corporate form.  It can also be used by a registered corporate entity to automate formal governance rules contained in corporate bylaws or imposed by law.”  The referred white paper proposes an entity that would use smart contracts to solve governance issues inherent in traditional corporations.  DAOs attempt to redesign corporate governance with blockchain such that contractual terms are “formalised, automated and enforced using software.”

Cybersecurity threats under DAOs

While DAOs offer increased transparency and efficiency, they are not immune to cybersecurity threats. Cybersecurity risks in DAO, primarily in governance, stem from vulnerabilities in the underlying blockchain technology and the DAO's smart contracts. Smart contract exploits, code vulnerabilities, and weaknesses in the underlying blockchain protocol can be exploited by malicious actors, leading to unauthorised access, fund manipulations, or disruptions in the governance process. Additionally, DAOs may face challenges related to phishing attacks, where individuals are tricked into revealing sensitive information, such as private keys, compromising the integrity of the governance structure. As DAOs continue to evolve, addressing and mitigating cybersecurity threats is crucial to ensuring the trust and reliability of decentralised governance mechanisms.

Centralisation/Concentration of Power

DAOs today actively try to leverage on-chain governance, where any governance votes or transactions are directly taken on the blockchain. But such governance is often plutocratic in nature, where the wealthy hold influences, rather than democracies, since those who possess the requisite number of tokens are only allowed to vote and each token staked implies that many numbers of votes emerge from the same individual. This concentration of power in the hands of “whales” often creates disadvantages for the newer entrants into the system who may have an in-depth background but lack the funds to cast a vote. Voting, presently in the blockchain sphere, lacks the requisite concept of “one man, one vote” which is critical in democratic societies.

Smart contract vulnerabilities and external threats

Smart contracts, self-executing pieces of code on a blockchain, are integral to decentralised applications and platforms. Despite their potential, smart contracts are susceptible to various vulnerabilities such as coding errors, where mistakes in the code can lead to funds being locked or released erroneously. Some of them have been mentioned as follows;

Smart Contracts are most prone to re-entrance attacks whereby an untrusted external code is allowed to be executed in a smart contract. This scenario occurs when a smart contract invokes an external contract, and the external contract subsequently re-invokes the initial contract. This sequence of events can lead to an infinite loop, and a reentrancy attack is a tactic exploiting this vulnerability in a smart contract. It enables an attacker to repeatedly invoke a function within the contract, potentially creating an endless loop and gaining unauthorised access to funds.

Additionally, smart contracts are also prone to oracle problems. Oracles refer to third-party services or mechanisms that provide smart contracts with real-world data. Since smart contracts on blockchain networks operate in a decentralised, isolated environment, they do not have direct access to external information, such as market prices, weather conditions, or sports scores. Oracles bridge this gap by acting as intermediaries, fetching and delivering off-chain data to smart contracts, enabling them to execute based on real-world conditions. The oracle problem within blockchain pertains to the difficulty of securely incorporating external data into smart contracts. The reliability of external data poses a potential vulnerability, as oracles may be manipulated or provide inaccurate information. This challenge jeopardises the credibility of blockchain applications that rely on precise and timely external data.

Sybil Attack: A Sybil attack involves a single node managing multiple active fake identities, known as Sybil identities, concurrently within a peer-to-peer network. The objective of such an attack is to weaken the authority or influence within a trustworthy system by acquiring the majority of control in the network. The fake identities are utilised to establish and exert this influence. A successful Sybil attack allows threat actors to perform unauthorised actions in the system.

Distributed Denial of Service Attacks: A Distributed Denial of Service (DDoS) attack is a malicious attempt to disrupt the regular functioning of a network, service, or website by overwhelming it with a flood of traffic. In a typical DDoS attack, multiple compromised computers or devices, often part of a botnet (a network of infected machines controlled by a single entity), are used to generate a massive volume of requests or data traffic. The targeted system becomes unable to respond to legitimate user requests due to the excessive traffic, leading to a denial of service.

Conclusion

Decentralised Autonomous Organisations (DAOs) represent a pioneering approach to governance on the blockchain, relying on smart contracts and community-driven decision-making. Despite their potential for increased transparency and efficiency, DAOs are not immune to cybersecurity threats. Vulnerabilities in smart contracts, such as reentrancy attacks and oracle problems, pose significant risks, and the concentration of voting power among wealthy token holders raises concerns about democratic principles. As DAOs continue to evolve, addressing these challenges is essential to ensuring the resilience and trustworthiness of decentralised governance mechanisms. Efforts to enhance security measures, promote inclusivity, and refine governance models will be crucial in establishing DAOs as robust and reliable entities in the broader landscape of blockchain technology.

References:

‍https://www.imperva.com/learn/application-security/sybil-attack/

‍https://www.tripwire.com/state-of-security/blockchain-security-understanding-vulnerabilities-and-mitigating-risks

‍https://medium.com/@RedStone_Finance/the-oracle-problem-and-its-implications-for-blockchains-c0c0ad9cf5a7

‍https://www.linkedin.com/posts/satish-kulkarni-bb96193_what-are-cybersecurity-risk-to-dao-and-how-activity-7048286955645677568-B3pV/ https://www.geeksforgeeks.org/what-is-ddosdistributed-denial-of-service/ Report of Investigation Pursuant to Section 21 (a) of the Securities Exchange Act of 1934: The DAO, Securities and Exchange Board, Release No. 81207/ July 25, 2017

‍https://www.sec.gov/litigation/investreport/34-81207.pdf https://www.legalserviceindia.com/legal/article-10921-blockchain-based-decentralized-autonomous-organizations-daos-.html

Introduction

Social media has become integral to our lives and livelihood in today’s digital world. Influencers are now strong people who shape trends, views, and consumer behaviour. Influencers have become targets for bad actors aiming to abuse their fame due to their significant internet presence. Unfortunately, account hacking has grown frequently, with significant ramifications for influencers and their followers. Furthermore, the emergence of social media platforms in recent years has opened the way for influencer culture. Influencers exert power over their followers’ ideas, lifestyle choices, and purchase decisions. Influencers and brands frequently collaborate to exploit their reach, resulting in a mutually beneficial environment. As a result, the value of influencer accounts has risen dramatically, attracting the attention of hackers trying to abuse their potential for financial gain or personal advantage.

Instances of recent attacks

Places of worship

The hackers have targeted renowned temples for fulfilling their malicious activities the recent attack happened on The Khautji Shyam Temple, a famous religious institution with enormous cultural and spiritual value for its adherents. It serves as a place of worship, community events, and numerous religious activities. However, since technology has invaded all sectors of life, the temple’s online presence has developed, giving worshippers access to information, virtual darshans (holy viewings), and interactive forums. Unfortunately, this digital growth has also rendered the shrine vulnerable to cyber threats. The hackers hacked the Facebook page twice in the month, demanded donations and hacked the cheques the devotes gave to the trust. The second event happened by posting objectional images on the page and hurting the sentiments of the devotees. The Committee of the temple has filed an FIR under various charges and is also seeking help from the cyber cell.

Social media Influencers

Influencers enjoy a vast online following worldwide, but their presence is limited to the digital space. Hence every video, photo is of importance to them. An incident took place with leading news anchor and reporter Barkha Dutt, where in her youtube channel was hacked into, and all the posts made from the channel were deleted. The hackers also replaced the channel’s logo with Tesla and were streaming a live video on the channel featuring Elon Musk. A similar incident was reported by influencer Tanmay Bhatt, who also lost all the content e had posted on his channel. The hackers use the following methods to con social media influencers:

• Social engineering
• Phishing
• Brute Force Attacks

Such attacks on influencers can cause harm to their reputation, can also cause financial loss, and even lose the trust of the viewers or the followers who follow them, thus further impacting the collaborations.

Safeguards

Social media influencers need to be very careful about their cyber security as their prominent presence is in the online world. The influencers from different platforms should practice the following safeguards to protect themselves and their content better online

Secure your accounts

Protecting your accounts with passphrases or strong passwords is the first step. The best strategy for doing this is to create a passphrase, a phrase only you know. We advise choosing a passphrase with at least four words and 15 characters.

To further secure your accounts, you must enable multi-factor authentication in the second step.

To access your account, a hacker must guess your password and provide a second authentication factor (such as a face scan or fingerprint) that matches yours.

Be careful about who has access

Many social media influencers collaborate with a team to help generate and post content while building their personal brands.

This entails using team members who can write and produce material that influencers can share themselves, according to some of them. In these situations, the influencer is the only person who still has access to the account.

There are more potential weak spots when more people have access. Additionally, it increases the number of ways a password or account access could fall into the hands of a cybercriminal. Only some staff members will be as cautious about password security as you may be.

Stay up-to-date on the threats

What’s the most significant way to combat threats to computer security? Information.

Cybercriminals constantly adapt their methods. It’s crucial to stay informed about these threats and how they can be utilised against you.

But it’s not just threats. Social media platforms and other service providers are likewise changing their offerings to avoid these challenges.

Educate yourself to protect yourself. You can keep one step ahead of the hazards that cybercriminals offer by continuously educating yourself.

Preach cybersecurity

As influencers, cyber security should be preached, no matter your agenda.

This will also enable users to inculcate best practices for digital hygiene.

This will also boost the reporting numbers and increase population awareness, thus eradicating such bad actors from our cyberspace.

Acknowledge the risks

Keeping a blind eye will always hurt the safety aspects, as ignorance always causes issues.

Risks should be kept in mind while creating the digital routine and netiquette

Always inform your users of risk existing and potential risks

Monitor threats

After the acknowledgement, it is essential to monitor threats.

Active lookout for threats will allow you to understand the modus Operandi and the vulnerabilities to avoid criminals

Threats monitoring is also a basic netizens’ responsibility to ensure that the threats are reported as they emerge.

Interpret the data

All cyber nodal agencies release data and trends of cybercrimes, understand the trends and protect your vulnerabilities.

Data interpretation can lead to an early flagging of threats and issues, thus protecting the cyber ecosystem by and large.

Create risk profiles

All influencers should create risk profiles and backup profiles.

This will also help protect one’s data as it can be stored on different profiles.

Risk profiles and having a private profile are essential to safeguard the basic cyber interests of an influencer.

Conclusion

As we go deeper into the digital age, we see more technologies emerging, but along with them, we see a new generation of cyber threats and challenges. The physical, as well as the cyberspace, is now inter twinned and interdependent. Practising basic cyber security practices, hygiene, netiquette, and monitoring best practices will go a long way in protecting the online interests of the Influencers and will impact their followers to engage in best practices thus safeguarding the cyber ecosystem at large.

Introduction

In today’s digital world, where everything is related to data, the more data you own, the more control and compliance you have over the market, which is why companies are looking for ways to use data to improve their business. But at the same time, they have to make sure they are protecting people’s privacy. It is very tricky to strike a balance between both of them. Imagine you are trying to bake a cake where you need to use all the ingredients to make it taste great, but you also have to make sure no one can tell what’s in it. That’s kind of what companies are dealing with when it comes to data. Here, ‘Pseudonymisation’ emerges as a critical technical and legal mechanism that offers a middle ground between data anonymisation and unrestricted data processing. 

Legal Framework and Regulatory Landscape 

Pseudonymisation, as defined by the General Data Protection Regulation (GDPR) in Article 4(5), refers to “the processing of personal data in such a manner that the personal data can no longer be attributed to a specific data subject without the use of additional information, provided that such additional information is kept separately and is subject to technical and organisational measures to ensure that the personal data are not attributed to an identified or identifiable natural person”. This technique represents a paradigm shift in data protection strategy, enabling organisations to preserve data utility while significantly reducing privacy risks. The growing importance of this balance is evident in the proliferation of data protection laws worldwide, from GDPR in Europe to India’s Digital Personal Data Protection Act (DPDP) of 2023. 

Its legal treatment varies across jurisdictions, but a convergent approach is emerging that recognises its value as a data protection safeguard while maintaining that the pseudonymised data remains personal data. Article 25(1) of GDPR recognises it as “an appropriate technical and organisational measure” and emphasises its role in reducing risks to data subjects. It protects personal data by reducing the risk of identifying individuals during data processing. The European Data Protection Board’s (EDPB) 2025 Guidelines on Pseudonymisation provide detailed guidance emphasising the importance of defining the “pseudonymisation domain”. It defines who is prevented from attributing data to specific individuals and ensures that the technical and organised measures are in place to block unauthorised linkage of pseudonymised data to the original data subjects. In India, while the DPDP Act does not explicitly define pseudonymisation, legal scholars argue that such data would still fall under the definition of personal data, as it remains potentially identifiable. The Act defines personal data defined in section 2(t) broadly as “any data about an individual who is identifiable by or in relation to such data,” suggesting that the pseudonymised information, being reversible, would continue to require compliance with data protection obligations. 

Further, the DPDP  Act, 2023 also includes principles of data minimisation and purpose limitation. Section 8(4) says that a “Data Fiduciary shall implement appropriate technical and organisational measures to ensure effective observance of the provisions of this Act and the Rules made under it.” The concept of Pseudonymization fits here because it is a recognised technical safeguard, which means companies can use pseudonymization as one of the methods or part of their compliance toolkit under Section 8(4) of the DPDP Act. However, its use should be assessed on a case to case basis, since ‘encryption’ is also considered one of the strongest methods for protecting personal data. The suitability of pseudonymization depends on the nature of the processing activity, the type of data involved, and the level of risk that needs to be mitigated. In practice, organisations may use pseudonymization in combination with other safeguards to strengthen overall compliance and security.

The European Court of Justice’s recent jurisprudence has introduced nuanced considerations about when pseudonymised data might not constitute personal data for certain entities. In cases where only the original controller possesses the means to re-identify individuals, third parties processing such data may not be subject to the full scope of data protection obligations, provided they cannot reasonably identify the data subjects. The “means reasonably likely” assessment represents a significant development in understanding the boundaries of data protection law. 

Corporate Implementation Strategies 

Companies find that pseudonymisation is not just about following rules, but it also brings real benefits. By using this technique, businesses can keep their data more secure and reduce the damage in the event of a breach. Customers feel more confident knowing that their information is protected, which builds trust. Additionally, companies can utilise this data for their research or other important purposes without compromising user privacy. 

Key Benefits of Pseudonymisation:

1. Enhanced Privacy Protection: It hides personal details like names or IDs with fake ones (with artificial values or codes), making it harder for accidental privacy breaches.
2. Preserved Data Utility: Unlike completely anonymous data, pseudonymised data keeps its usefulness by maintaining important patterns and relationships within datasets.
3. Facilitate Data Sharing: It’s easier to share pseudonymised data with partners or researchers because it protects privacy while still being useful.

However, using pseudonymisation is not as easy as companies have to deal with tricky technical issues like choosing the right methods, such as encryption or tokenisation and managing security keys safely. They have to implement strong policies to stop anyone from figuring out who the data belongs to. This can get expensive and complicated, especially when dealing with a large amount of data, and it often requires expert help and regular upkeep. 

Balancing Privacy Rights and Data Utility

The primary challenge in pseudonymisation is striking the right balance between protecting individuals' privacy and maintaining the utility of the data. To get this right, companies need to consider several factors, such as why they are using the data, the potential hacker's level of skill, and the type of data being used.

Conclusion 

Pseudonymisation offers a practical middle ground between full anonymisation and restricted data use, enabling organisations to harness the value of data while protecting individual privacy. Legally, it is recognised as a safeguard but still treated as personal data, requiring compliance under frameworks like GDPR and India’s DPDP Act. For companies, it is not only regulatory adherence but also ensuring that it builds trust and enhances data security. However, its effectiveness depends on robust technical methods, governance, and vigilance. Striking the right balance between privacy and data utility is crucial for sustainable, ethical, and innovation-driven data practices.

References:

1. https://gdpr-info.eu/art-4-gdpr/
2. https://www.meity.gov.in/static/uploads/2024/06/2bf1f0e9f04e6fb4f8fef35e82c42aa5.pdf
3. https://gdpr-info.eu/art-25-gdpr/
4. https://www.edpb.europa.eu/system/files/2025-01/edpb_guidelines_202501_pseudonymisation_en.pdf
5. https://curia.europa.eu/juris/document/document.jsf?text=&docid=303863&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=16466915
6. https://curia.europa.eu/juris/document/document.jsf?text=&docid=303863&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=16466915

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