In an unexpected turn of events, crypto group FloorDAO, devoted to NFT finance, has split into two factions due to internal disagreements. One splinter group, known as FloorkDAO, controlled by activist investors displeased with the project’s trajectory, has managed to transfer over $2.5 million from FloorDAO’s treasury, comprising crypto tokens and NFTs. The split was followed by a redemption process that saw FLOOR tokens valued at nearly $5 each, an approximate high for this year, even though current trading value stands at $3.88.
FloorDAO’s roots trace back to Olympus DAO, a notable protocol that brought novel approaches to token issuance, fundraising, and treasury management. Given this ancestry, expectations for FloorDAO’s native token to maintain a value at par with or surpassing its treasury’s “book value” ran high. Initial documentations of the project promised an arbitrage mechanism to balance any incongruity. However, when the value of FLOOR fell under book value, the proposed mechanism remained theoretical.
As the value declined, project insiders failed to stick to their pledge of introducing a redemption process – a fact evidenced by Discord records and conversations with long-standing investors. Instead, they formulated an upgrade protocol, stripping voting power and treasury rights from the token holders. Naturally, this decision sparked discontent among FLOOR’s investors, who, ahead of the “v2” upgrade, propagated oppositional voices and demanded an exit from the DAO with their share of the treasury. They saw the planned upgrade not as a step forward, but as a violation of the project’s fundamental principles and forward promises.
The rift resulted in FloorDAO splitting into two – one continued under the original name with its focus on NFTs, while the other, FloorkDAO, became an exit for disgruntled investors. The emergence of FloorkDAO echoes the rising influence of activist investors within decentralized autonomous organizations (DAOs). For a project failing to align with market dynamics or sustain its token’s book value, pressure from investors to push for buyouts rather than spend from the treasury is mounting.
Activist investors are often viewed as attackers on the DAO by project insiders. However, these activists argue they are protecting their positions and the interests of fellow disrupted token holders. A recent blog post declared, “FloorDAO has now successfully forked to allow members who are not aligned with the long-term vision of the DAO to exit.” Certainly, the unfolding saga of FloorDAO portrays a novel, thrilling chapter in the annals of crypto governance.
Source: Cryptonews
