Editing Graceful Exit BOND market (section)

== Security ==
This mechanism inhibits the natural market for REP tokens, since its existence ethically justifies the slashing of any REP tokens that can be proven to have been sold. Therefore the BOND market should, under most circumstances, prevent the existence of any REP market. The reason is that REP tokens sold at market are then not as valuable as BONDs, if the threat of slashing is supported by active policing.  

This inhibits the everpresent threat of [[51% attack|51% attacks]] in any DAO. Without a Graceful Exit BOND market, the desire to cash out would give the incentive to sell REP tokens. Whenever REP tokens can be purchased, there is an opportunity to accumulate a majority of the power in a DAO merely by purchasing them. Given the [[DAO#Weighted Democracy|weighted democratic nature]] of a [[DAO#Primary DAOs|primary DAO]], once someone has 51% of the power, they can pass any [[Legislative governance|legislation]] desired. Regardless of safeguards, eventually, a patient adversary of the DAO can create new standards and strip the DAO of value –  for 51% of the value of a DAO, a wealthy and patient adversary can gain 100% of the value of the DAO. With the Graceful Exit BOND market in place, this attack is inhibited, because then, the only way to aquire 51% of the power in the DAO is to outcompete the rest of the DAO by working. Using the availability smart contract's random selection of workers according to existing REP, a probability argument shows this is only possible when more than 50% of the DAO is not using their REP to capacity. Even then it will take a significant period of time to achieve, and at the same time the attacker would enrich existing REP holders by an absolute minimum of twice their existing value.

However, DAOs which choose to institute a Graceful Exit are opening an attack vector: pseudonymous members in uncertain legal jurisdictions who cash out their REP immediately in trade for BONDs which are sold at market for cash cannot subsequently be slashed. This diminishes one of the strengths of REP tokens, their future orientation, since a Graceful Exit prevents the DAO from reviewing the actions that led to the minting of the REP tokens.