Aragon Association’s Governance Crisis: Examining ANT Token Buybacks & Future Prospects

Dramatic, turbulent sky above a Swiss landscape, Aragon co-founder Luis Cuende in the foreground advocating token buybacks, contrasting light and dark shades signifying conflict, a group of activist crypto traders in the distance, tensions reflected in the brushstrokes, Aragon community with hopeful expressions seeking resolution, vague references to legal hurdles, overall mood of uncertainty and optimism.

The ANT token has recently experienced a surge, reaching its highest levels for May after Aragon co-founder Luis Cuende advocated for token buybacks as a solution to the governance crisis currently plaguing the Switzerland-based Aragon Association. Cuende, who also created the DAO builder’s platform and retains influence in the association running it, has called for $30 million in ANT buybacks using a smart contract designed to buy all tokens trading above the 30-day moving average, currently at $3.09. Additionally, Cuende suggested that Aragon’s $200 million treasury should gradually transfer to the Aragon DAO – an entity controlled by ANT token holders – over a period of five years.

This proposal comes amid a volatile time for Aragon, with the Aragon Association recently deciding to place its DAO into lockdown to protect against a “51% attack.” Facing pressure from the RFV Raiders, a group of activist crypto traders including the crypto hedge fund Arca, the Aragon Association reversed a community-approved decision to move its $200 million treasury to ANT holders’ control. In response, the association said it was “repurposing the Aragon DAO as part of a new grants program,” with the aim to “secure these funds from those seeking to access them for their own financial gains.”

The RFV Raiders pose a serious challenge to Aragon’s governance, as they collectively possess enough voting power to win any vote over the team’s objections, including the ability to block grant allocations. This dilemma highlights the difficult position Aragon now faces – while it cannot afford to completely ignore the RFV Raiders, it must continue to rely on the ANT token for any form of governance.

Cuende’s buyback proposal is not guaranteed to be implemented, however, as he is “not involved in the day-to-day of Aragon” and warns that any solution could take time. Any proposal the Aragon Association chooses to pursue will need to be thoroughly reviewed by the legal team, a process that may involve numerous hurdles.

Despite the ongoing challenges, there are indications that cooler heads may be prevailing within the Aragon community. Three activist investors that CoinDesk spoke to described Cuende’s proposal as a good starting point. Given the current climate, it will be important for the Aragon Association to carefully consider all options and work towards a resolution that satisfies both internal and external stakeholders, while maintaining the security and integrity of the platform.

Source: Coindesk

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