The Aragon Association behind Aragon, an open-source, community-centric platform on Ethereum building tools for uses depending on decentralized autonomous organizations (DAOs), has taken steps to secure its treasury after suspicious activity was picked out from its official Discord channel.
Aragon DAO Repurposed
Subsequently, in a statement on May 9, the association has repurposed the Aragon DAO to focus its funding on a new grants program targeting decentralized application (dApp) and DAO builders. The decision is part of the association’s “fiduciary duty” to protect its treasury from “raiders.”
Through this grants program, the Aragon DAO will seed various builders launching solutions targeting decentralized finance (DeFi), DAOs, and even plugins leveraging their technology stack.
The decision will ensure that the Aragon DAO’s treasury is directed to what matters and cushioned against malicious actors.
In this case, the goal will be to funnel funds to dApp builders that help advance the DAO’s core mission of availing tools for users and projects to experiment with decentralized governance that they claim works at the “speed of software.”
Unlike hierarchical governance systems in traditional projects, DAOs are smart contracts-driven. They ensure that token holders of the DAO take charge, driving the project in the direction most DAO members agree.
For example, depending on the project’s immediate needs, the DAO can request that members vote on proposals to enhance the platform. Sometimes, DAO members can be asked to select quality projects deserving of funding.
Protection From Value Raiders Like Arca
The Aragon Association repurposing of the DAO and ensuring that treasury funds are directed towards ecosystem expansion is amid a 51% “financial” attack on several DAOs, including Mango, Rook, Fei protocol, and more.
Rook DAO was the latest to be dissolved, and half its treasury dissolved, netting big profits for the Risk-Free Value (RFV) Raiders.
RFV Raiders is described as “sophisticated, well-resourced, and coordinated.” In recent months, they have taken over and liquidated functional DAOs using Aragon’s infrastructure.
Further analysis reveals that RFV, whose member includes Arca Capital Management, appears to be targeting Aragon DAO and its treasury, judging from the unusual spike in user activity on their Discord channel.
3. A few days ago, a bunch of people showed on Discord asking about the treasury, some of them with spammy behavior.
After seeing the offensive language and that some of them were involved in a treasury's takeover in another DAO (RookDAO), the mod banned them quickly.
— Luis Cuende (@licuende) May 10, 2023
Typically, RFV targets DAO treasuries to manipulate prices. Once they take charge of the DAO, they override any other priority, including organically growing the ecosystem by funding builders. For this reason, the Aragon Association took necessary steps to cushion its treasury and direct funds toward funding builders.
Before this intervention by Aragon Association, would-be raiders, including Arca management, have been stockpiling ANT, the native token of the Aragon project, in the past few days with the hope of taking over the DAO.