This article is more than nine months old

dYdX grants trustee resigns amid DAO breach of trust uproar

  • Alexios Valonasis, a dYdX DAO grants trustee, has been accused of breach of trust.
  • The accusation states that Valonasis signed a transaction to send grant money to a recipient with whom he had dealings, but failed to disclose this relationship to the DAO.
  • Valonasis did not dispute the claims but said he did nothing wrong.
  • He has stepped down from his position as a trustee.

dYdX DAO, the online governance structure behind decentralised exchange dYdX, is the latest DeFi community to be rocked by an alleged conflict of interest by trusted individuals handling a crypto grants programme.

Last month, DAO member RealVovochka accused Alexios Valonasis, a former trustee of the dYdX grants programme and a prominent dYdX DAO member, of leveraging his former position as a trustee to process a $20,000 grant to Cryptohondos in December without disclosing his relationship with the crypto media project.

RealVovocha and other DAO members said that Valonasis’ failure to disclose his relationship with Cryptohondos represents a breach of the trustee agreement that stipulates that trustees must disclose potential conflicts of interest.

Others described it as a trivial matter and bemoaned the negative reaction from some community members.

Valonasis’ sympathisers within the DAO also said there was no malicious intent on his part.

Cryptohondos has not been accused of any wrongdoing.

Valonasis has denied any wrongdoing and said he had nothing to hide about his relationship with Cryptohondos, but stepped down as a dYdX grant trustee in mid-August, blaming alleged online bullying he faced over the issue.

The controversy has spurred a shakeup of the dYdX DAO grants programme. These changes have been rolled into an existing proposal to extend the grant.

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dYdX DAO voted on this extension and the vote included the appointment of a new set of trustees, as well as a new enforcer.

The vote ended on August 27 and with almost unanimous approval from participants and the newly elected trustees will commence their duties on September 15.

The accusations highlight ongoing issues surrounding DAO grants programmes.

Recently, Griff Green, a prominent Etherean and Optimism DAO delegate, issued a mea culpa for failing to disclose his relationship with Optimism grant recipients.

Elsewhere, members of Blu3DAO have been accused of using a Harmony grant programme as a cash cow but representatives of the organisation denied some of the claims.

What are the accusations against Valonasis?

The dYdX controversy became public on August 17 when RealVovochka levied accusations of breach of trust against Valonasis in a post on the dYdX DAO governance forum.

Governance forums host discussions among DAO community members and delegates. These forums are also where proposals that will bring changes to the DAO’s DeFi project are debated and finetuned before moving to the voting stage.

RealVovochka is the DAO member’s online pseudonym, but his identity is known to both DL News and dYdX DAO members. He declined to use his real name stating his preference to be identified by his pseudonym.

He said he found the evidence while researching the activities of trustees during a time when he had put himself up for consideration as a grantor on dYdX DAO. RealVovochka was not successful in the campaign.

Trustees of dYdX grants evaluate and approve grants under the supervision of an enforcer — in this case Reverie, an investment and advisory firm that counts the DAO as one of its clients

RealVovochka accused Valonasis of using his position to be part of the signatories of the transaction that sent the a grant at the end of last year but did not disclose the relationship to the DAO.

The DAO member pointed at information supposedly provided by the Whois database that suggested that the Cryptohondos website was registered by Valonasis.

The domain registration matches the date Cryptohondo’s grant was approved by dYdX DAO, RealVovochka said.

Wallet addresses associated with Valonasis and Cryptohondos also show significant transaction linkage, the DAO member said.

On-chain sleuths usually use heuristic analysis to determine on-chain linkage among wallet addresses to establish relationships that might not be apparent to a casual observer.

NOW READ: Griff Green’s disclosure ‘mistake’ sparks heated debate among Optimism DAO

RealVovochka provided several transactions that seemed to indicate the same entity was in control of the wallets linked to Valonasis and Cryptohondos.

These transactions include similar deposits and withdrawals to and from centralised exchanges that occurred within minutes of each other and involved the same amounts.

Other examples pointed to wallet screenshots published in Cryptohondos blog posts that were allegedly from Valonasis’ wallets.

The forum post also revealed fund transfers identified as direct transactions between the trustee and Cryptohondos.

DL News independently verified the evidence provided by RealVovochka.

Nothing to hide

Valonasis responded on the dYdX forum that he had nothing to hide, but said he had a business relationship with Cryptohondos that included marketing and search engine optimisation services. Valonasis said he was paid for his services.

Valonasis said he had done nothing wrong and argued that he was not part of the trustee team when Cryptohondos obtained its grant in March 2022. Valonasis became a trustee in July 2022, according to an announcement that month.

”Clearly there was no fraud committed there no matter what my relationship with Cryptohondos was/is,” he said in the forum.

Concerning the on-chain wallet linkage, Valonasis said he sent funds to Cryptohondos to trade despite the platform being a news website.

“I’m not hiding anything and I always use my real name,” Valonasis said on the forum. “If I had secrets, I would have concealed them already.”

Valonasis addressed the Cryptohondos domain name registration, saying it was not evidence of any alleged grift. He said if the action was fraudulent, he could have hidden his name as the domain registrant “for just €14.26 per year.”

‘Clearly there was no fraud committed there no matter what my relationship with Cryptohondos was/is.’

—  Valonasis

When pressed by several DAO members for evidence to back his claims and clear the issue, Valonasis said he could not do so, stating that confidentiality agreements precluded him from sharing information.

Valonasis tendered his resignation as a trustee on August 17, blaming it on “constant bullying” from unidentified community members.

Breach of trust

The accusations have spurred a fierce debate within the dYdX DAO, with some accusing Valonasis of breach of trust, urging the DAO to take action against him.

NOW READ: Gitcoin faces accusations ‘power was abused’ over diversity grant process

The breach of trust argument hinged on the fact that Valonasis signed a transaction that sent funds to Cryptohondos in December and did not reveal his association with the project to the DAO.

Others blasted Reverie, saying it failed to do its due diligence as an enforcer of the grants programme.

DAO members have previously criticised Reverie over the $70,000 per month compensation it receives from dYdX to be its grants enforcer.

Nothing wrong

People associated with Reverie did not take Valonasis to task in their assessment offered on the forum.

“At no point did Alexios leverage his position as trustee to influence the decision to recommend, approve, or pay for the grant,” Carl Bergman, a Reverie researcher, said on the forum.

Bergman said it did not matter that Valonasis approved fund payments to Cryptohondos, since the grant was approved before he became a trustee. The Reverie team member also stated that Valonasis was only one of three signatories to the transaction.

RealVovochka, however, countered the latter point by showing the actual transaction was signed by five wallets, including Valonasis. Since the grants wallet is a three-of-five multisig, Valonasis’ signature was not required.

NOW READ: How a Harmony grant programme became a ‘money-grab’ for Blu3 DAO members

A three-of-five multisig means that there are five signatories and at least three are required to approve a transaction.

Some community members who spoke to DL News on the condition of anonymity said it was in Reverie’s best interest to sweep the matter under the rug.

Several Reverie team members declined to be quoted in this article.

Following the original publication of this story, a representative from Cryptohondos reached out to DL News and said the platform had not done anything wrong, and that “there was no conflict of interest.”

The dYdX Foundation did not return requests for comment.

This story has been updated to clarify that Cryptohondos has not been accused of any wrongdoing, to include the company’s comment, and to report the end result of the DAO vote.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at

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