Research Summary
The article discusses the strategy of DAO dissolution in the DeFi landscape and identifies potential DAOs at risk for such events. The author explains the concept of DAO “rage quits,” where a DAO is shut down, and the remaining treasury assets are distributed to the token holders. The author uses the example of ROOK DAO, which voted to shut down and distribute its treasury, leading to a 5x increase in the token price.
Actionable Insights:
- Understand DAO Dissolution: The article explains the concept of DAO “rage quits,” where a DAO is shut down, and the remaining treasury assets are distributed to the token holders. This strategy is based on the fact that some DAOs are worth more dead than alive.
- Identify At-Risk DAOs: The author provides a list of potentially at-risk DAOs, including BitDAO, Ethereum Name Service, Stargate, Aragon, Venus, Instadapp, Wombat Exchange, Hop Protocol, Euler, Gearbox, and Tornado Cash. The author cautions that this list requires further due diligence, taking into account factors like token slippage, tokens held by the actual community, governance structure, etc.
- Monitor DAO Challenges: The author discusses the challenges faced by DAOs, including legal clarity, managing legal relationships globally, limiting potential liability for DAO token holders, balancing efficiency with decentralization and transparency in governance, and talent management. The author also discusses the concept of a “slow rug,” where funds are siphoned off over a longer period, often disguised as legitimate operational expenses such as salaries.
