After a recent cyber attack, the Aragon Association has decided to cancel its plans to grant voting rights to Aragon (ANT) token holders over the Aragon decentralized autonomous organization (DAO). Aragon, an open-source platform designed for creating and managing DAOs, initially intended to let its native ANT token holders have a say in the project’s future direction.
Aragon Association’s Announcement and Fiduciary Duty
In a tweet on May 9, the Switzerland-based Aragon Association, which is responsible for Aragon’s management, announced that it had exercised its “fiduciary duty” to protect its treasury and overall mission by “repurposing the Aragon DAO as part of a new grants program.”Â
This decision followed a 51% attack on the recently launched Aragon DAO by a group known as the “Risk-Free Value (RFV) Raiders,” who aimed to manipulate ANT usage for financial gains.
Aragon’s blog post revealed that the RFV Raiders are connected to the previous attack and liquidation of Rook DAO, which happened in early April. The Raiders are allegedly activist investors from the asset management company Arca Capital Management, who call themselves the “vultures of crypto.”
Aragon’s Treasury and Swiss Regulations
The blog post further explained the rationale behind the controversial decision:
“The Aragon treasury was established with the explicit mission of supporting builders to advance decentralized governance infrastructure.”
Aragon highlighted that Swiss regulations require the treasury to be used for its stated purposes. Consequently, the organization’s fiduciary duty obliges it to “secure these funds from those seeking to access them for their financial gains.”
“There is clear evidence that the entities involved in Aragon’s attack are pursuing that end.”
Aragon Grants DAO and the Transfer of Funds
In a Twitter thread on May 9, detailing the current state of the Aragon DAO, it was mentioned that Aragon transferred an initial payment of 300,000 USD Coin to the Aragon Grants DAO. Aragon asserts that the funds held by the DAO will stay on-chain and be governed by wrapped ANT (wANT) holders.
On May 2, Arca Capital published an open letter in response to an earlier disagreement that banned several stakeholders from Aragon’s Discord channel. This disagreement partially explained the recent 51% “attack.”Â
Arca argued 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 important DAO public goods.” However, Arca added that this process could not commence until the “treasury transfer is further along.”
Aragon’s decision to repurpose its DAO occurred just over a month after announcing an expanded collaboration with the well-known Ethereum scaling organization Polygon Labs. This partnership aims to develop decentralized governance infrastructure further and expand Aragon’s reach within the crypto community.
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