DeFi

Another DAO Project Faces Dissolution

Web3 Station

Web3 Station

— 2 min read
Another DAO Project Faces Dissolution

Jade Protocol, an early-stage crypto investment DAO, is facing the possibility of dissolution and the distribution of its $31 million treasury to investors.

Key Points

  • Proposal for Dissolution: On September 25, a member named VampireOfCrypto proposed the dissolution of the Jade Protocol DAO. The proposal cited a darkening regulatory environment that is slowing down Jade's progress and posing risks to all DAOs, which are organizations governed by voting to make decisions.
  • Member Statement: The member wrote, "Redistributing the treasury funds to all token holders immediately is a win-win situation."
  • Proposal Details: The investor suggested that the DAO should liquidate its $31 million treasury and start issuing redemption payouts to JADE token holders.

Market Reaction

Despite the news of potential dissolution, the JADE token has surged by 17% in the past 24 hours, currently priced at $17.98. JADE is supported on two chains, BSC and Avalanche.

JADE Price Fluctuation: Daily chart on CoinMarketcap as of September 28, 2023.

Broader Context

Jade Protocol is not the only DAO facing dissolution recently. Several autonomous organizations in the industry have also been struggling and have decided to either adjust or end their operations, including GroDAO, Nouns DAO, Hector Network, and recently, the largest Polkadot community in China.

Challenges in the DeFi Sector

The DeFi ecosystem, in general, has faced significant challenges in 2023, with many projects having to cease operations due to financial constraints, reduced activity, and lack of profitable potential. Notable examples include Saddle Finance, Algofi, and Clockwork.

Conclusion

The dissolution of DAOs like Jade Protocol highlights the broader struggles within the DeFi sector. Regulatory pressures, financial sustainability, and market dynamics are critical factors influencing the future of decentralized organizations. As the crypto industry continues to evolve, projects will need to adapt to these challenges to ensure their survival and growth.

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