DAO is considered one of the pillars that make up the entire DeFi industry today. But does DAO work as effectively as the “beautiful words” the community praises?
Events that go against the goals of the DAO
Juno decided to withdraw the token himself
Juno would be a regular project like many other DeFi projects if it weren’t for the story of the Juno community opening a vote to confiscate the JUNO airdrop tokens of the “whale” wallet. The reason for this decision was that the project did not anticipate having a whale wallet receive many token airdrops – fearing that it would affect its fledgling network.
The proposal was approved, albeit based on “Code is Law” – it is perfectly legal for a whale wallet to receive such tokens.
However, the drama is still long. After approving the decision to confiscate the token, the project conducted a hard fork of the blockchain but waited forever to see the token transferred. At the same time, the whale’s wallet has already deducted the money.
After a while of checking, they were shocked when they discovered that instead of copying and pasting the receiving wallet address into the upgrade code, they had mistakenly pasted the transaction hash. As a result, the $36 million worth of tokens were sent to “nothing”.
Merit Circle vs. Yield Guild Games
Again a game of “flipping” of DAO.
DAO Merit Circle (MC) admin account “HoneyBarrel” suddenly proposed one day exhorting everyone to find a way to “dismiss” the investor status of Yield Guild Games (YGG), terminate the cooperation relationship, ready to buy back the MC tokens that YGG is holding. And the reason given is that YGG does not help Merit Circle as YGG has committed when agreeing to invest in the seed round.
However, the deeper reason is still that the DAO does not want YGG, a gaming guild that is considered a direct competitor of Merit Circle, to hold such a large amount of MC tokens. So decided not to follow what was committed in SAFT (SAFT is a type of contract signed between the project and the VC in the pre-sale rounds).
Although this story has ended peacefully, we – both individual investors and large funds – ask the question: Is the decision power of the DAO higher than what was committed in SAFT? ? Although the VC signed SAFT to invest the project’s tokens in the pre-sale rounds, the DAO then still has the right to vote to “cancel SAFT”, not deliver the token as committed? Just because “DAO represents the will of the community”?
“Dictator’s DAO” Tribe – Fei
After the Fei-Rari alliance disbanded, everything seemed to have ended: a TIP-112 proposal was submitted to repay outstanding debts.
Almost immediately, however, the team implemented a veto (veto) of the previous TIP-112 proposal. And the funny thing is that after the Tribe team left the possibility of “stop refunding”, the majority of votes moved in this direction.
Whatever the reason, this case makes it clear that the DAO is purely “anonymous”. Any vote seems to depend entirely on the wishes of the project team, not the community.
Does the project team want a refund? DAO vote refund.
Now the project doesn’t want to refund anymore? DAO voted veto.
This dictatorship became the subject of memes of ridicule in the community.
Solend proposes to take control of whale wallets
If the humorous DAO stories mentioned above are not too familiar to many readers, the following Solend story has probably spread throughout the crypto community worldwide.
If you want to tell this story in just one short line, it will be Solend for a loan, but fearing the liquidation of the whale wallet will affect the project, the team proposes to vote to take over this wallet to handle it reason always.
All of Solend’s proposals are voted on by the wishes of the project developers. Although it stated that it did not interfere with the voting results, the community still managed to find the address to “replace” Solend.
Decentralization has always been the spirit of the whole crypto market. The purpose of the DAO is also the same – to bring a new form of management in the hope of “decentralization”.
However, no concept does not go through the “golden test”. The problems of the DAO are still there, waiting for us to find a solution.
Vitalik Buterin, the father of Ethereum that underpins the entire DeFi array today, has also repeatedly pointed out the shortcomings of DAO governance. One solution that Vitalik is the emergence of Soulbound Token.
And no matter what method or technology is used, voting in the DAO must be “empowering the community”. Let users make decisions about the project’s future, not just following the “will” of the dev team or “big-handed” investors.
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