Aragon DAO, once known as the largest DAO platform in history, passed a vote yesterday and is preparing to take the Aragon Association (hereinafter referred to as AA), the legal administrator of the Aragon Project, to court.
On November 21, according to the Aragon DAO official website, the Aragon DAO community has passed two votes to support the Delaware-based encryption trading company Patagon Management LLC (hereinafter referred to as Patagon) in filing a lawsuit against the Aragon founding team. Provide 300,000 USDC to support Patagons legal proceedings.
In fact, there have been clues to this vote from a long time ago, and the source of the controversy is AA.
Aragon DAO: The lawsuit aims to hold AA members accountable and protect investor funds
AA can be said to be the legal steward of the Aragon project, responsible for managing the funds raised in the Aragon network token sale. According to the official website, Aragon’s founders Luis Cuende and Jorge Izquierdo serve as co-founders and executive directors respectively of the Aragon Association committee members.
Left: Jorge Izquierdo; Right: Luis Cuende
It is reported that this vote was in response to the previous move of AA - AA had previously dissolved in place through ETH redemption and terminated the operation of the governance token ANT.
At the same time, the proposal states that others will also be able to help fund the lawsuit, and if the case is successful, Aragon DAO community members will get their funds back and receive 10% interest annually. They will also share 5% of the total funds, and It is returned to the token holders; but if they lose the case, they will not receive compensation.
In addition, the lawsuit will be overseen by an oversight committee composed of representatives of investment firm Arca, cryptocurrency trader DCF God, and other individuals who go by the pseudonyms Wismerhill, Tedward, CM, Triangle, and Yakitori.
Detailed documents on the voting page show that AA unilaterally shut down Aragons governance token ANT on November 2 without a voting process. At the same time, AA offered a redemption package of about 95% of BV, but retained $11 million as an obligation and unclaimed funds after one year, leaving holders in a difficult situation.
“It is estimated that 25-32% of holders have not claimed the funds, and they will retain the remaining funds of more than $50 million, returning only 60,000 ETH (approximately 22%) of the 275,000 ETH initially raised by investors. investor.
In addition, more details of the document show that the proposal aims to decide whether to initiate procedures to pursue responsible members of AA to ensure that investors’ funds are returned to investors and that investors’ funds are not taken away by the Aragon team.
It is worth noting that Patagon, which was elected by Aragon DAO as a plaintiff to file a lawsuit against AA, had previouslyAugust 11, issued a 24-page investigation report stating that AA considered “selling the project” to an undisclosed bidder for an unknown price in June.
The report also accuses AA of squandering $180 million worth of its various crypto assets and questions the organization’s compliance with Swiss non-profit laws.
AA: The sponsor of the proposal is spreading baseless accusations to pursue personal interests
In response to the passage of this proposal, AA also responded positively on November 22, stating that it would respond to the lawsuit if necessary. At the same time, it believed that the initiator of the proposal had been spreading baseless accusations in order to pursue personal Profit maximization, and the accusations are false: We look forward to proving in court that they are unfounded, if necessary.
AA pointed out on the social platform that the initiators of this proposal are several accounts claiming to be RFV Raiders, and these accounts do not represent the larger ANT token holders. At the same time, more than 11.1 million ANTs have participated in redemptions, as AA has dedicated 87% of its funds to allow all ANT holders to redeem their ANTs for ETH.
In comparison, only about 1.6 million ANT were voted by these accounts and the proposal passed: “Interestingly, several of these accounts participated in the redemption process immediately after the DAO vote.”
Community: Aragon’s real innovation is finding all the ways governance can go wrong
Regarding this incident and the long-standing problems of Aragon DAO, there are different opinions in the encryption industry community, but without exception, they focus on the governance dilemma of DAO.
Crypto industry investors, community KOL DCF GOD (@dcfgod) pointed out: This is crazy. Aragon DAO has voted to directly sue the Aragon team for unfair redemption offers. This may be the first time that a DAO has paid to legitimize its own team?
Synthetix founder Kain Warwick (@kaiynne) also commented: The real innovation of the Aragon project is to find all the ways in which governance can go wrong. They say that DAO governance is chaotic and dysfunctional. Maybe the founders of all super voting shares are not paranoid...
Interestingly, according to BlockBeats observation, Aragon’s co-founder Jorge Izquierdo (@izqui 9 ) On November 21, the same day that Aragon DAO passed the proposal to initiate a lawsuit against AA, it updated the status of its social account.
Jorge forwarded Y combinator founder Paul Graham (@paulg) comments on the recent developments of the OpenAI board of directors, in which Paul believes that the idea of a confrontation between 3 board members and 95% of the employees is unprecedented to the point that it seems almost wrong: I simply dont think so. I never thought something like this was possible. If 95% does not count as a vote of no confidence, then what number counts as a vote of no confidence?
This may also reflect Jorges thinking on governance issues to a certain extent.
The largest DAO platform in history has frequently encountered governance problems this year
In fact, Aragon is a decentralized governance solution for Web3 communities and organizations, and is also the largest DAO platform in history. It has been established for 6 years and once managed more than 900 million US dollars in assets. Aragon has made great contributions to the development of the DAO industry. For example, it developed aragonOS, a DAO framework that experiments with governance at software speed, and provides support for Ethereum-based DAOs such as Lido and Curve.
However, this platform and its legal administrator AA have continued to have problems this year. For example, on May 10 this year, AA announced that it would ban the voting rights of ANT token holders. Such voting rights include determining the strategic direction of Aragons future development and the use of funds of over 100 million US dollars.
Just before AA announced the ban on the voting rights of ANT token holders, the cryptocurrency investment fund Arca called on Aragon to repurchase ANT tokens in an open letter. AA believes that Investors such as Arca launched a 51% attack on it and also said that groups such as Arca have destroyed many DAOs and their communities.
On May 17, Arca Chief Investment Officer Jeff Dorman publicly stated that the narrative of the 51% attack is actually incorrect. We are ANT token holders, we want to use our tokens to participate in governance, and we have not tried to dissolve Aragon. .
A community member previously detailed AA’s past “six sins” (Aragon community member (@Samsara 79416227 ) has pointed out that AA ignored votes, failed to provide transparency, failed to promote problem resolution, frustrated its own team members, lied on the executive director, and showed bad faith), the existing Aragon DAO voted to take AA to court. This may also reflect the common governance dilemma encountered by DAO to a certain extent. How will DAO solve governance problems in the future, and where will it go? BlockBeats will also be watching.
