The news broke like a flash crash on a quiet DeFi afternoon: a Likud lawmaker had publicly challenged Benjamin Netanyahu’s plan to scrap primary elections. To the casual observer, it’s just another day in Israeli politics. To anyone who has spent years auditing token distribution logic or mediating governance crises in decentralized protocols, it is something far more familiar. It is a classic centralization attack—executed not by a malicious actor, but by a leader who believes he is indispensable. And it carries lessons that every DAO, every DeFi protocol, and every community-driven project needs to internalize before their own governance model fractures under the weight of ego and power.
Context: A Political Protocol Under Siege The Likud party has operated under a primary election system for decades—a crude but functional form of liquid democracy where party members vote directly on candidate lists. Netanyahu’s proposal to abolish these primaries would transfer the power to handpick candidates from the grassroots to a small central committee loyal to him. In protocol terms, it is akin to replacing a time-tested on-chain voting mechanism with an off-chain multisig controlled by the founder. The justification? National security, efficiency, and the need to avoid distractions during wartime. But as any DeFi veteran knows, “security” and “efficiency” are the most common covers for power grabs.
This is not the first time we have seen a founder attempt to centralize governance. In 2020, during the Compound governance crisis, the core team tried to push through a proposal that would have given them veto power over community votes. The backlash was swift, and the proposal died. But Israel’s Likud has no equivalent of a timelock or a veto council. The only check is the lawmaker who stood up and said no.
The core of this dispute is not about election mechanics. It is about the fundamental tension between trust and verification. Code is law, but people are purpose. The primary election system is a verification mechanism—it allows party members to audit their leader’s claims of broad support. By scrapping it, Netanyahu is asking his party to trust him blindly. In blockchain terms, he is asking them to move from a transparent, auditable L1 to a permissioned sidechain where he holds the keys.
Core Insight: The Game Theory of Primaries During my time auditing the Ethos token distribution in 2017, I learned that any governance system can be gamed if the incentives are not aligned. Primary elections are no different. Netanyahu’s move is a textbook example of a rational actor trying to reduce information asymmetry. If primaries remain, his actual support within the party becomes public knowledge. Opponents can rally around a challenger, and his negotiating power erodes. By eliminating primaries, he creates an information monopoly—only he knows the true distribution of power, and he can use that uncertainty to maintain control.
This is the same dynamic we see in DAOs when founders push for “urgent” governance changes during market downturns. They argue that speed is necessary for survival, but the real motive is often to prevent the community from organizing an alternative. In my work with Aave during the 2020 DeFi Summer, I saw similar behavior when liquidity providers demanded a say in reserve parameters. The team’s instinct was to centralize decision-making to avoid the chaos of a free-for-all. But the community resisted, and eventually, Aave’s governance became one of the most resilient in the space. Resilience beats hype every time.
The parallel with Likud is striking. Israel is surrounded by existential threats. Netanyahu can argue, with some justification, that a prolonged primary battle could distract from the war in Gaza and the simmering conflict with Hezbollah. But that argument ignores the cost of centralization: when all power is concentrated in one individual, the system becomes brittle. If Netanyahu makes a strategic blunder, there is no internal mechanism to correct it. The community—in this case, the party members—are left with only one option: exit. And when you have no way to voice dissent internally, you take to the streets, or you form a new party.
The core insight here is that primary elections are not a bug of democratic governance; they are a feature. They provide essential feedback loops that allow a community to self-correct before a crisis point. Without them, the system is blind. In DAO governance, we call this a “governance attack surface”—the set of actions an insider can take without community consent. Netanyahu is expanding that surface, and it will not go unchallenged.
Contrarian Angle: The Pragmatism Test Now, let me offer the contrarian view that I have heard countless times from protocol founders desperate to push through a contentious upgrade. Sometimes, centralization is necessary for survival. In a time of existential war, a nation-state cannot afford to let internal democracy slow down critical decisions. The same logic applies to DeFi protocols under active exploit: you cannot put a governance vote on a 7-day timelock while hackers are draining the treasury. There is a reason that Compound and Uniswap both maintain emergency multisigs with the power to pause the protocol.
But here is the crucial difference: those emergency powers are always temporary and always subject to community review afterward. The Likud proposal is permanent. It is not a circuit breaker; it is a rearchitecture of the governance model. The contrarian view misses the point that resilience is not about avoiding all disruption; it is about having the ability to recover from disruption. A system that centralizes in a crisis may survive the immediate threat, but it loses the trust that made it resilient in the long run.
During the bear market of 2022, I helped manage the Compound governance transition. The community was fractured, trust was low, and many thought the only way forward was to give the core team emergency authority. Instead, we focused on transparency—open forums, regular updates, and a clear path to decentralized control. It was messy, but it worked. The protocol survived because the community felt it had ownership. Netanyahu’s path is the opposite: it exchanges long-term trust for short-term control, and that is a losing trade.
Takeaway: The Governance Lessons from Likud Israel’s primary election battle is a microcosm of a larger struggle playing out across the decentralized world. Every time a founder or leader tries to eliminate a verification mechanism in the name of efficiency, they are repeating a mistake that history—and blockchain—has taught us to avoid. Trust, verify, but also connect. The strength of a governance system lies not in its speed but in its ability to absorb dissent without fracturing.
As the Likud party debates its future, I will be watching the same signals I watch in DAO governance: whether the opposition consolidates, whether the leader offers a compromise, and whether the community is willing to exit if necessary. The outcome will be a data point for every protocol builder who wonders if democratic governance is worth the friction. It is. Code is law, but people are purpose.
And if Netanyahu’s opponents succeed in preserving the primaries, they will have proven that resilience beats hype every time. If they fail, the lesson will be equally stark: that even in a nation hardened by decades of conflict, the greatest threat to security is not an external enemy, but a leader who forgets that no one is above the protocol.