Jade Protocol mulls ‘good faith’ proposal to dissolve $32m DAO treasury

Jade Protocol is the latest DeFi DAO facing pressure from investors to liquidate its treasury and call time on the project.

This clamour comes following a proposal this week by a longtime investor in the project, who goes by the pseudonym Vampire of Crypto.

The proposal calls for Jade Protocol DAO to dissolve due to uncertainty about its future. This dissolution, if approved, would involve the liquidation of Jade’s $32 million treasury to fund a redemption process by investors.

While this proposal is no different from a so-called rage quit, where DAO participants demand the total or partial liquidation of a project’s treasury, its author says the recommendation is not malicious.

“This proposal was created in good faith to benefit all long-time investors who have been rekt beforehand in JADE,” Vampire of Crypto told DL News. Rekt is crypto and investment slang for when a trader incurs massive loses.

JADE is the native token of Jade Protocol, a crypto investment collective. The token, which trades on the BNB Chain and Avalanche blockchains, grants holders access to early-stage crypto investment deals.

JADE is down 97% from its peak price, according to data from CoinMarketCap, but it doubled after the proposal was published.

This sudden price rise led to speculation by some community members in the Jade Discord server that certain insiders were banking on a possible DAO vote to liquidate the treasury and were buying up JADE tokens.

“We’re well aware of the DAO Raider phenomenon,” Jo3Dang3r, another longtime Jade investor, told DL News. “They may prevail, time will tell. But if they pump the price of JADE in the short term, that may benefit some investors, especially if they fail.”

Jo3Dang3r also said the proposed redemption was not a rage quit.

He instead called it “an analysis of the cryptospace as a whole, measured against the possible liabilities of operating a DAO, and the opportunities available in the market in the short to mid term.”

‘Not a slow rug’

While admitting that Jade Protocol is a failed project, Vampire of Crypto said it is not a slow rug.

Slow rugging in crypto is the accusation levied against the teams behind failed crypto projects whose investors feel have enriched themselves with bogus salaries without providing value for token holders.

This accusation has been levied against projects such as Hector Network and Parrot Finance, both of which recently went through rage quit processes.

Rather than being a slow rug, Vampire of Crypto blamed the project’s demise on DeFi’s uncertain legal standing.

“The evolving regulatory and legal landscape has caused the project to go into a position of stagnation and there is no clear path anymore,” he said.

Jo3Dang3r also echoed Vampire of Crypto’s statement that despite its failings, Jade Protocol is “definitely not a slow rug.”

Jon Ray, Jade’s community manager, expressed disappointment at the possibility of a vote to dissolve the treasury and blamed regulatory headwinds for the project’s decline.

“Being bottlenecked by macro legal sentiment paired with low volume for deal flow has certainly knee-capped us a bit in the short term,” Ray said on the DAO’s governance forum.

Ray told DL News his role as a community manager is to “help the community land on a path forward that makes the most sense for them.”

“There are real concerns being discussed within the JADE governance channels and regardless of how this specific proposal turns out, I think it’s been healthy for the community to map all possible outcomes,” Ray said.

Despite the project’s decline, several community members praised the preservation of Jade’s treasury through the bear market conditions that have prevailed since its inception.

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 osato@dlnews.com.