The Aragon token holders have voted in favor of initiating legal action against the founding team behind the Aragon project as tensions flare over the planned dissolution of the Aragon Association.
On Nov. 20, Aragon token holders approved two governance proposals — one outlining plans to sue the Aragon Association, alongside a second vote to mobilize 300,000 USDC tokens to fund the legal action.
This is pretty crazy
The @AragonProject DAO has voted yes sue the Aragon team directly for the unfair redemption offer
Might be the first time ever a dao pays to go legal on its own team? pic.twitter.com/bP27niQx1V
— DCF GOD (@dcfgod) November 21, 2023
While the lawsuit attracted unanimous support, the funding proposal received 1.6M votes in favor and 1M against.
“On November 2, the Aragon Association (AA) unilaterally shut down the ANT token, the governance token of Aragon, without a vote,” the proposals’ authors wrote. “This proposal is to decide whether or not to start a process to go after the AA’s responsible members in order to make sure the money from investors is returned to investors and not taken by the Aragon Team into their new secretive company.”
The Aragon saga has been brewing for several months, with the project’s treasury making headlines in May when opportunistic investors bought up underperforming ANT tokens en masse. Buyers hoped to leverage governance to enable disgruntled ANT holders to redeem their tokens for ETH, a potentially profitable move that AA controversially nixed. The association claimed it was under attack from an informal group known as the RFV (risk-free value) Raiders.
The latest proposals were published in response to the Aragon Association announcing it would dissolve and shut down the project’s ANT token in early November without engaging community governance. The association announced it would allow token holders to redeem their assets for 86,343 ETH — accounting for 87% of the treasury’s non-native assets.
Aragon said it would retain $11M to “cover outstanding obligations and mitigate against regulatory uncertainty.” The association also said it will launch a “Product Council” to oversee and continue development of Aragon’s products moving forward.
However, token holders accuse the association of seeking to keep more than $50M worth of treasury assets per its token redemption plan.
Aragon launched in 2016 and provides infrastructure for decentralized autonomous organizations (DAOs). The association estimates the aragonOS powers DAOs controlling $16B worth of assets including Lido and Curve.
The funds allocated to support the lawsuit comprise a “highly conditional grant” that was sent to Patagon Management LLC, a Delaware-based trading firm that previously engaged in “similar legal action” against SpartacusDAO’s alleged founder, Wei Wu, on behalf of token holders.
“The Aragon team has no basis to block this, any excuses they use are hollow,” Patagon tweeted. “This has not stopped them from indirectly threatening Patagon as the enforcer of the DAO in this case, and further shows their desperation.”
The Aragon team have no basis to block this, any excuses they use are hollow. This has not stopped them from indirectly threatening Patagon as the enforcer of the DAO in this case, and further shows their desperation
— Patagon Management (@PatagonLLC) November 21, 2023
A U.S. court sided with Patagon’s suit against SpartacasDAO in May, ordering a freeze on $35M worth of crypto and a restraining order preventing Wu from fleeing the country.