Aragon Retools DAO After 51% Attack: Debating Treasury Security Vs. Decentralized Governance

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The Aragon Association, a Switzerland-based organization overseeing the management of Aragon, an open-source framework for decentralized autonomous organizations (DAOs), recently pulled plans to grant its Aragon (ANT) token holders voting rights over the organization’s future direction. The decision followed a 51% attack on the newly launched Aragon DAO by a group called the “Risk Free Value (RFV) Raiders,” who sought to manipulate the use of ANT for financial gain.

In a May 9 tweet, the Aragon Association announced that it was repurposing the Aragon DAO as part of a new grants program, exercising its “fiduciary duty” to secure its treasury and overall mission. This move was in response to the coordinated attack by the RFV Raiders, who also took down Rook DAO. According to a blog post from Aragon, the Raiders are linked to the recent attack and liquidation of Rook DAO, which occurred in early April. Aragon claims that the Raiders are activist investors from asset management firm Arca Capital Management and self-proclaimed “vultures of crypto.”

The Aragon treasury was established explicitly to support builders in advancing decentralized governance infrastructure. Due to Swiss regulations that mandate its use for those stated ends, Aragon believes its fiduciary duty compels it to secure these funds from entities seeking access for their financial gains. The organization has cited clear evidence that the groups involved in the attack on Aragon are pursuing that end.

A May 9 Twitter thread provided further details on the current status of the Aragon DAO. It revealed that Aragon transferred an initial payment of 300,000 USD Coin (USDC) to the Aragon Grants DAO. The funds held by the DAO will remain on-chain and are to be governed by wrapped ANT (wANT) holders.

On May 2, Arca Capital penned an open letter responding to a prior disagreement that saw various stakeholders barred from Aragon’s Discord. Arca stated that their 51% “attack” was necessary for token holders to find creative solutions to return value to the token while allowing Aragon to continue building important DAO public goods. They remarked that this could not begin until the treasury transfer is further along.

Aragon’s decision to repurpose its DAO comes just over a month after the announcement of increased collaboration with Ethereum scaling organization, Polygon Labs. Following the update, the price of Aragon’s ANT token fell slightly by over 4% from $2.95 to $2.83, but at the time of publication, it has risen by 2% in the last 24 hours, according to CoinGecko data.

Source: Cointelegraph

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