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The Jade Protocol is facing calls from a longtime member to liquidate its $31 million token treasury and issue redemptions to all token holders.
Following the proposal, the native JADE token registered a significant surge in value.
Jade Protocol Faces Calls To Liquidate
Jade Protocol is an investment group specializing in sourcing early-stage crypto deals. The protocol’s native token is the JADE token, which trades on Avalanche and BSC. The token also allows users to access the larger Jade Protocol community. On Wednesday, the protocol faced calls to liquidate after a longtime member proposed that the decentralized autonomous organization (DAO) liquidate its $31 million treasury and begin issuing redemptions to token holders. Under the “Dissolve DAO” call-to-action, the JADE token would become a cashout.
A Risk To All Token Holders
The proposal was put forward on the 25th of September by a member with the screen name VampireOfCrypto. The proposal cited an extremely unfavorable regulatory climate that was significantly slowing down Jade Protocol’s progress. The regulatory environment is also putting all DAOs in peril. Decentralized autonomous organizations, or DAOs, are crypto collectives, with token holders having a say in the governance and development of the associated protocol.
The investor further added that numerous legal questions and a brutal crypto winter have combined to freeze out crypto trading volume. It has also stymied Jade’s deal flow. The investor had joined Jade Protocol’s Discord server in July 2022, stated that the DAO poses a major investment risk to all token holders, and added,
“Distributing all treasury funds back to all token holders without delay is the ultimate win-win situation for everyone.”
Latest Project To Face Pressure From Investors
Jade protocol has become the latest crypto project to face considerable pressure from its investors to shut down. Over the past year, a group of activist investors have led calls for rage quits and treasury redemptions in many DAOs. This was seen in Nouns DAO when the NFT experiment lost over half of its $50 million treasury to its own disgruntled investors. That fork resulted from months of squabbling and contentious decisions around the running of Nouns DAO.
Another project that saw a fight between investors and key backers was Aragon. Key backers of the project had doubled down on their decision to ban certain Discord server members. The team said in its statement,
“Discord servers and other trusted coordination platforms are tools used by DAOs, but they themselves are not DAOs.”
Activist investors claim that cash-outs are the only way to protect investors from floundering DAOs and receiving pushback and plenty of profit. According to a statement posted on the Discord server by Jade’s press liaison, Jon Ray, some of these activist investors have also been joining the Jade Protocol. Kevin Randleman, a high-randing DAO member, stated in a post on Discord,
“It is a sad and frustrating reflection on the state of legislation in our space that one of the most positive, supportive, and oldest members of the community is bringing this forward.”
However, he conceded that the challenges faced by Jade Protocol are real, and the community must decide its future course of action together. Randleman also highlighted a number of bureaucratic and technical barriers that needed to be cleared before redemptions were a possibility. He also called for a $2 million legal defense fund to help core contributors wind down the DAO in the event that dissolution is approved.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.