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Jade Protocol Grapples with Decision on $31M Token Treasury Liquidation

Sep 29, 2023 at 10:35 am

A prominent member within the decentralized autonomous organization (DAO) linked with the Jade Protocol has expressed reservations regarding potential investment risks. This member has put forward a proposal advocating for the cessation of operations, suggesting the liquidation of Jade's substantial $31 million treasury to offer redemptions to token holders.

Renowned for its proficiency in identifying nascent crypto ventures, the Jade Protocol witnessed a surge in the value of its native JADE token in response to this proposal. Crafted by a member operating under the alias "VampireOfCrypto," the initiative outlines a transformation for JADE, shifting its role from an access token to a mechanism for cashing out.

VampireOfCrypto, who became a member of Jade's Discord server in July 2022, pinpointed escalating regulatory uncertainties and the demanding conditions of the crypto market as substantial factors impeding Jade's progress. He contends that these uncertainties not only jeopardize Jade but also pose a threat to all DAOs. DAOs, distinct crypto communities, actively involve token holders in decision-making processes.

VampireOfCrypto emphasized, "The DAO poses a major investment risk to all token holders," underscoring the potential ramifications of the current landscape. He further advocated for the prompt redistribution of all treasury funds back to token holders, deeming it a mutually beneficial solution.

Jade Protocol joins the ranks of crypto projects facing mounting pressure from investors to contemplate closure. Over the past year, activist investors have championed "rage quits" and treasury redemptions in various DAOs, positing cashing out as a practical means to shield investors from struggling DAOs. While this approach has sparked spirited debates within the crypto community, it has also yielded substantial gains for certain participants.

Kevin Randleman, a distinguished figure within the DAO, expressed disappointment with the proposal, characterizing it as a reflection of the challenges presented by the existing regulatory framework in the crypto space. Randleman acknowledged the genuine obstacles confronting Jade and underscored the pivotal role the community plays in determining its trajectory.

Randleman outlined a series of bureaucratic and technical impediments that must be surmounted before a redemption process can be set in motion. He also proposed the establishment of a $2 million "legal defense fund" to support core contributors in orchestrating the DAO's winding down, should the dissolution be sanctioned.

The proposal to liquidate Jade Protocol's treasury spotlights the intricate terrain that DAOs navigate in today's crypto realm. As the community engages in deliberations concerning Jade's future, the decision will inevitably leave an indelible mark on the course of this innovative project. The broader crypto community will be keenly observing as Jade's members weigh the potential advantages and risks inherent in this pivotal proposal.

Read more: Balancer DAO: A Beacon of Resilience in the Face of Crypto Exploits

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