Crypto Has Seen Drama Over ENS, BonkDAO and VVV. What Does DeFi's Future Look Like?

**Proph3t** (0:00)
It is, to me, a little bit crazy to just be like, I mean, he is the founder, so I think, like, respect to him and he has built this. So it's not like it's completely not a good idea, but it is just a little bit crazy that you just, like, throw all this money with no accountability over what is supposed to be a decentralized protocol, like, with no fiduciary duty.

**Laura Shin** (0:20)
Hi, everyone. Welcome to Unchained, your no hype resource for all things crypto. I'm your host, Laura Shin. Thanks for joining this livestream. Before we dive into today's discussion, we're going to take a quick word to hear from the sponsors who made this episode is brought to you by Cape, America's privacy first mobile carrier. Same premium service you'd expect from any other carrier, but designed so your number, your location and your data actually stay yours. Get 33% off six months at cape.co.
Unchained.
Today's topic is Daos and their issues and where they go from here. Here to discuss are Nick Almond, head of governance at the Jito Foundation, and Proph3, co-founder of MetaDAO. Welcome Nick and Proph3.

**Nick Almond** (1:13)
Hi Laura, great to be on. Thanks for having me.

**Laura Shin** (1:17)
Nice to have you both. So the last couple of years, the Dao space has been changing a lot. We saw last year that a few Daos paused or even disbanded. In the last month, there's been a lot of different Dao controversies.
On a related note, we're also seeing this debate about tokens versus equity that was sparked by Dragonfly investing in Venice.
I wanted to talk about a number of these incidents in depth amidst this backdrop of this moment where it feels like due to the fact that crypto is in an adoption phase, we're going to maybe be on this centralization trend for a little while. At least this is just my theory. I kind of see that maybe in the future, once the technology is more adopted, then we will see decentralization swing things swing back to the decentralized end of things. But in order to unpack all these trends, let's just start with one of the bigger controversies that happen, which is the one with the Ethereum name system or ENS Dao. I feel like this one really highlights a lot of the themes. Nick, do you want to just give us a recap of what happened there that created such a firestorm on social media and continues to?

**Nick Almond** (2:33)
Yeah. It's still ongoing, I guess.
ENS Dao is the latest of the Dao dramas, I would say.
It's been brewing for quite a while. I think it was a Dao that has started to show some of the classic failings of Dao's over the years. They hit a level of, I would say, late stage Dao, mature Dao, when quite a few people had become part of the scenery, if you like, of the Dao of the time. It progressed into a network of working groups. There was a grant system. Quite a lot of money was leaving the Treasury to fund various satellite companies that had formed to be active service providers on the Dao. People were starting to get a little bit upset about a variety of typical Dao dramas, I would say, got quite political. There was questions around the efficacy of the spending and all that stuff. It came to a head over the last month or so. Effectively, the founder utilized their own tokens to effectively intervene in a security council that was looking to stop them transferring the treasury to the foundation. The foundation has decided to come in, take over the treasury, assume responsibility, take it away from the Dao. The founder, Nick, has effectively utilized his own tokens to achieve it. That's where we're at at the moment.

**Laura Shin** (4:10)
Yeah, so I think it was the COO of the Labs entity, Catherine Wu, made a proposal that the management of the treasury be handled by a foundation. And they cited all kinds of reasons for the proposal, which I think a number of them are legitimate. But then what ended up happening was I think there was at the same time a proposal to renew a Security Council, whose main function is to veto any bad governance proposals that make it through to basically protect the Dao.
And what happened was that Nick Johnson, as you mentioned, the co-founder of ENS Labs, he used his tokens to block that renewal. And another kind of interesting tidbit is that in the snapshot, he didn't vote. And so when he did an executable vote, it sort of came out of nowhere, because then it didn't match how the snapshot looked. So yeah, this definitely caused a lot of, you know, Sturm und Drang, I guess we would call it.