In light of a misalignment of interests between its management team and governance token holders, ROOK DAO is currently debating on a proposal to dissolve the decentralized organization.
Formerly known as KeeperDAO, Rook is an Ethereum-based maximum extractable value (MEV) marketplace and open settlement protocol. According to its documentation, the protocol is community-owned and governed by a DAO. However, it appears the structure of the protocol is poised to change as there are talks to dissolve the DAO and distribute the ROOK-governed treasury to ROOK governance token holders.
The draft proposal to dissolve the DAO was put forward by DAO member Wismerhill nearly two weeks ago. Wismer argues that the DAO is suffering from a “profound misalignment” of interests between the management team and ROOK governance token holders.
According to him, the management team had rolled out a “vicious” gatekeeping mechanism that allows them to veto community-led proposals that do not fit their narrative.
Despite an alarming lack of product growth (79% decline of product usage volume over the last 6 months) and product development, the team is currently burning ~$6.1M per year from the DAO treasury, with an average yearly compensation of $300,000 per contributor (with ROOK equity only representing 11% of this compensation).
Ultimately, Wismer is asking that the DAO be shut down and the governance token distributed to holders in a pro-rata format. This will translate to approximately $54.9 per token.
Over at the forum, a handful of community members are in support of the idea to dissolve the DAO. However, there were some concerns about the legal implications of the decision. One member known as Stile, asked:
Have you considered the potential legal ramifications of this type of action? Do you believe that this would not violate securities law or that if it were in violation, that it’d be unlikely for action to be taken against ROOK token holders?
There was also the idea to create a spinout DAO for those who wish to leave the current group.
