Aragon, an open-source platform designed to launch decentralized autonomous organizations (DAOs), has canceled plans to allow its native token holders to vote on the future direction of the organization. The Aragon Association, a Switzerland-based organization that manages Aragon, made the decision after the recently launched Aragon DAO suffered a 51% attack by a group called the “Risk Free Value (RFV) Raiders.” The attackers were attempting to manipulate the use of the Aragon (ANT) token to achieve financial gain.
According to a blog post from Aragon, the RFV Raiders are connected to the recent attack and liquidation of Rook DAO, which happened in early April. Aragon alleges that the Raiders are activist investors from the asset management firm Arca Capital Management, who refer to themselves as the “vultures of crypto.” Due to Swiss regulations that mandate the use of Aragon’s treasury for the explicit purpose of supporting builders to advance decentralized governance infrastructure, Aragon’s fiduciary duty compelled it to repurpose the Aragon DAO as part of a new grants program to secure its funds from those seeking to access them for their own financial gain.
In a Twitter thread detailing the current status of the Aragon DAO, Aragon transferred an initial payment of 300,000 USD Coin (USDC) to the Aragon Grants DAO. The funds held by the DAO are to remain on-chain and will be governed by wrapped ANT (wANT) holders.
On May 2, Arca Capital penned an open letter responding to a disagreement that saw a number of stakeholders barred from Aragon’s Discord. In the letter, Arca claimed that it was necessary to allow token holders to find creative solutions to return value to the token while simultaneously allowing Aragon to continue building public goods. Aragon’s decision to repurpose its DAO comes just over a month after the team announced further collaboration with Ethereum scaling organization Polygon Labs.
Aragon’s native ANT token stumbled more than 4% to $2.83 after the update, according to CoinGecko data. The price of ANT is currently up 2% in the last 24 hours. With the cancellation of voting rights for ANT token holders, Aragon will need to find other ways to gauge its community’s wants and needs.
The decentralized structure of a DAO allows members to make decisions independently of central government control. DAOs are decentralized and transparent organizations run by Smart Contracts on public blockchain networks like Ethereum, which ensure that all decisions are recorded publicly and permanently on the blockchain. DAOs are designed to be transparent and democratic, giving all members a say in governance. The concept behind DAOs is to create organizations that cannot be controlled by any one individual or institution.
However, 51% attacks can undermine the democratic nature of a DAO and prevent members from having a meaningful say in the organization’s future direction. In a 51% attack, attackers gain control of the majority of a blockchain’s computing power, enabling them to control the network and manipulate its operations.
The purpose of Aragon is to provide an open-source platform for individuals or organizations to create and run DAOs. Aragon aims to empower people to manage their own affairs without the need for centralized intermediaries. Aragon offers access to a range of tools for DAO creation, such as templates, a voting system, and a dispute resolution system. DAOs enable users to pool their resources and work together towards a common goal.
The cancellation of voting rights for ANT token holders may have an impact on Aragon’s user base and decentralization goals. However, Aragon’s decision was driven by its fiduciary duty to secure its funds from those seeking to access them for personal gain. With the recent 51% attack on the Aragon DAO, it is clear that Aragon needs to take measures to safeguard its treasury and mission.
Overall, the cancellation of voting rights for ANT token holders highlights the importance of defending against malicious attacks and securing the funds of a DAO. As DAOs become more prevalent in the world of decentralized finance (DeFi), it is essential to ensure that they function ethically and transparently, with the interests of all members in mind. Aragon’s move to repurpose its DAO to secure its funds is an important step towards achieving this goal.