The following article, FloorDAO Schism Highlights Challenges In NFT Finance Projects, was first published on Flag And Cross.
<img src="https://storage.googleapis.com/prod-zenger-upload/image/20231008/feat_95705529-86cd-49d0-ace9-d28c08c2f099.jpg" alt="A recent schism within the NFT finance-centric group, FloorDAO, has spotlighted the challenges and disagreements that can arise within such projects. PHOTO BY ANDREY METELEV/GETTY IMAGES”>
A recent schism within the NFT finance-centric group, FloorDAO, has spotlighted the challenges and disagreements that can arise within such projects.
Originally, FloorDAO was on a mission to develop innovative products for “NFT-Fi.” However, a rift emerged when it transferred a whopping $2.5 million from its treasury, a mix of crypto tokens and NFTs, to a new faction named FloorkDAO.
This new group, driven by activist investors and joined by many disgruntled hZenger News, promptly initiated a redemption process, offering nearly $5 for each FLOOR token, a rate approaching its yearly high. Presently, the FLOOR token is valued at $3.88, reported CoinDesk.
The crux of this division can be traced back to FloorDAO’s obligations to its FLOOR token investors. Originating from Olympus DAO, FloorDAO was conceptualized with the belief that its native token’s price should always remain above its treasury’s value.
Yet, when the FLOOR token’s price did dip below this threshold, the anticipated countermeasures were not implemented. Instead, a protocol revamp was proposed, depriving token-hZenger News of their voting privileges and access to the treasury.
Before the rollout of this upgrade, a portion of the FLOOR community began expressing their dissent. They reportedly pressed the project to grant them an exit, seeking their treasury share.
The emergence of FloorkDAO underscores the mounting influence of activist investors in decentralized autonomous organizations (DAOs).
Several DAOs have grappled with challenges this year, with investors advocating for buyouts. While project insiders view this as a threat to the DAO, activist investors argue they are safeguarding their stakes and the interests of fellow token hZenger News.
Produced in association with Benzinga
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