DAOs, also known as decentralized autonomous protocols, aim at a community that shares, directs, and develops a protocol based on the number of project tokens they hold. When the project is small, everything is peaceful, but when the project grows and plays a particularly important role in a certain area, each token becomes extremely valuable.
Listening to it, everyone will see similarities with Korean movies in gaining 0.1% of a corporation’s shares to get the largest amount of shares to manipulate that corporation itself. It can be said that this is natural for a company or project as it becomes larger and its role becomes more and more special in the market.
As DeFi Protocols Become Politicized
Maker DAO – When Co Founders conflict
Luca is the head of the LOVE committee (which evaluates Maker DAO loans to partners) and has condemned Maker DAO’s Founder, Dragon Capital,… and many other members in and related to Maker Dao for joining forces. to approve a $400M loan to Monetalis when the conditions to limit all risks in this loan have not been fully resolved.
And then there were many battles taking place when Rune – Co Founder of Maker DAO also silently voted many times against the decisions of LOVE in general and Luca in particular. However, Luca has the support of A16Z, Block Tower and many other parties. Even Nikolai – Co Founder of Maker DAO who left the project also returned to support Luca when in the past Nikolai and Rune had a lot of animosity.
Both Luce and Nikolai believe that voting is just a form of manipulation by Rune and his accomplices when they already have enough MKR to be able to approve any proposal.
UniSwap: War between A16Z and the Uniswap community
February 2, 2023: 0xPlasma Labs has submitted a proposal calling for the deployment of Uniswap V3 on BNB Chain. In the offline voting, there were 20 million votes agreeing with the proposal, equivalent to more than 80% of the Uniswap community agreeing with this proposal and only 4.9 million votes disagreeing with the implementation of Uniswap V3 on BNB Chain.
However, when the voting took place on-chain, the investment fund A16Z (Andreessen Horowitz) used all of its 15M UNI to oppose the above proposal to deploy Uniswap V3 on BNB Chain and this was the first time in A16Z fund’s history with Uniswap. There are two reasons to explain this:
- A16Z cannot participate in offline voting because their UNI tokens are in custody, according to The Block.
- In the proposal, Uniswap V3 will only use Wormhole to solve the cross-chain problem. However, before that, A16Z and Sequioa invested a lot of money in Layer Zero. A16Z hopes that Uniswap V3 on BNB Chain will integrate Layer Zero, not Wormhole (behind Wormhole is the Jump Crypto fund). This move unintentionally puts A16Z in a confrontational position with the Uniswap community.
There has been a lot of criticism from KOLs and the UniSwap community about this A16Z has placed his own interests above the interests of the protocol and the community.
However, until February 10, with the solidarity of the Uniswap community, this platform will officially set foot on BNB Chain and use Wormhole’s services. But in the near future, A16Z may change its strategy because according to Blockworks, A16Z owns about 64M UNI but many of their tokens are being delegated to third parties, so will A16Z earn revenue in the near future? Return these tokens and cause trouble for Uniswap in the future?
Accept or run away?
The fact that Blue-chip DeFi protocols are becoming increasingly politicized is something we have seen in our lifetime. When companies and corporations go through difficult times developing products, building business models, finding customers, etc., then there are fights to compete for positions. power within the corporation.
So instead of becoming angry, from my perspective, people should accept and find investment opportunities around these events.
Once again we can affirm that the politicization of DeFi is understandable and is part of the development roadmap of any society or economy. Therefore, instead of being afraid, worried, or opposed, look for investment opportunities for yourself.
Investment Opportunities Surrounding These Events
After these events, we see that the tokens that we previously thought had no use case were useless and had no growth motivation, but funds are holding a lot of them and in very large quantities. So do these investment funds or whales hold the tokens of these projects simply to participate and control the protocol? In my opinion, not really.
Because if so, the protocols will always participate in voting, but that doesn’t happen too often, so I believe that funds and whales hold project tokens because of 2 main factors:
- Participate in governance to adjust the development direction of the project in a direction that benefits an individual or an organization.
- Invest for long-term profits.
And as I once shared in the article Tips for Investing in Crypto Projects with “Foolish” Tokenomic, the most important thing when investing in projects like this is that everyone must understand the position of the funds and whales. Understanding the position of VCs & Whales helps you determine the current position of the project and the position you want to participate in in the future.
Even VCs and Whales themselves hold these tokens for a long time. With a moderate amount of capital and a long-term strategy, what do you have to worry about about this investment?
Summary
Getting angry, yelling, worrying about an event you can’t control won’t help your portfolio grow, won’t make you better, and won’t make you happier. Instead, learn how to Accept and observe opportunities in places that least people think about.
The politicization of DeFi is understandable and there will certainly be more interesting things to come in the future.
