Abracadabra (SPELL) Adopts a "Centralized" Approach Amid Legal Concerns
Another DeFi project has chosen a "centralized" approach in its legal and operational structure. The latest name to take this route is Abracadabra, the developer behind the stablecoin MIM and the token SPELL.
Abracadabra's Centralization Move
In a forum post, the project has called on Abracadabra DAO to support a plan to "shift power" and transform the organization into a more centralized entity involving lawyers, trustees, and regulatory authorities. This "centralized" mechanism almost contradicts the core values of a DAO, where token holders are the ones who have a say in making final decisions.
However, the project shared in the post:
"While we remain committed to maintaining a decentralized organization, we believe that a centralized legal structure is still crucial. The aim here is not to change Abracadabra's initial decentralized nature but to protect this organization from legal risks."
Abracadabra DAO is the latest crypto project to transition from a decentralized governance mechanism to a centralized model. Previously, SushiSwap had taken a similar approach due to intense regulatory scrutiny surrounding this business model.
For Abracadabra DAO, the project claims that the new approach will enable the team to manage the DAO's intellectual property more effectively and handle operational costs related to servers "while still keeping control in the hands of SPELL token holders."
The Transition Process
SPELL token holders will vote through three transition phases, starting with choosing a legal environment for the new entity. The four countries currently under consideration are Switzerland, Singapore, Malta, and Bermuda.
Phases 2 and 3 will involve voting on the role of the new entity and how it will operate.
In the past, Abracadabra itself has been embroiled in controversies, with one of the project's members, Daniele Sestagalli, being linked to negative rumors and unclear associations with 0xSifu.
Stay tuned for more updates on Abracadabra's progress and other significant developments in the DeFi space!
