PisDAOa crypto group focused on NFT finance, has split into two separate entities due to disagreements between investors.
The project, which aims to develop products for “NFT-Fi”, transferred more than $2.5 million of its treasury, consisting of cryptographic tokens and NFTs, to a splinter group called FloorkDAO.
The group is controlled by activist investors who were unhappy with the direction of the project.
The move started a redemption process that paid almost $5 per FLOOR token, close to its highest value this year, although the current trading price is $3.88.
The split within FloorDAO comes after months of internal strife over the project’s commitment to its obligations to FLOOR investors.
FloorDAO originated as a spin-off of Olympus DAO, a major protocol that revolutionized fundraising, token issuance and treasury management.
Given its lineage, FloorDAO’s native token was expected to hold a value equal to or greater than the “book value” of its treasury.
Initial project documentation outlined a mechanism to address any discrepancies, allowing for the distribution of assets in the event of a fall below book value.
However, when the FLOOR price inevitably fell below book value, the theoretical arbitrage mechanism did not come into effect.
Last year, project experts pledged to introduce a redemption mechanism to rectify this problem, according to Discord logs and conversations with long-term investors.
However, they later abandoned that promise and instead planned a protocol update that removed the voting power and treasury rights of token holders.
The FLOOR community started to object before the V2 update
Prior to the implementation of the “v2” update, a subset of the FLOOR community began to oppose it, asking for a chance to go out the DAO and claim your share of the treasure before the upgrade.
They saw the upgrade as a betrayal of the project’s original principles and future promises.
These token holders consistently voted to buy back their tokens instead of acquiring more NFTs for the treasury.
Finally, FloorDAO experts recognized the growing influence of the disgruntled blog and decided to split the project.
A vote earlier this year paved the way for FloorDAO to split into two groups: one that retained the original name and NFT focus, and another called FloorkDAO, which served as an escape hatch for desil investors delusional
The emergence of FloorkDAO reflects the growing power of activist investors within decentralized autonomous organizations (DAOs).
Projects struggling to find product-market fit or maintain the book value of their token have faced pressure from investors to initiate purchases rather than continue spending from the treasury.
Many DAOs consider their issued tokens as government chips, with more tokens equaling greater decision-making power.
Arbitrage investors often buy tokens that trade below book value and then advocate for mechanisms to allow them to cash out, leading to an activist approach.
While project experts see the actions of activist investors as an attack on the DAO, the activists see themselves as safeguarding their positions and the interests of all token holders who join them in their discontent.
“FloorDAO has successfully forked to allow members who are not aligned with the DAO’s long-term vision to exit,” a blog post from earlier this week. said.