Earlier this year, Ethereum-based protocol Rook DAO reached a deal with a group of investors who refer to themselves as “Risk Free Value (RFV) Raiders,” where the latter would receive 60% of the protocol’s treasury and buy out token holder’s governing rights.
The new entity, called Incubator DAO, proposed returning value to token holders by offering ROOK holders the option to redeem their tokens for a pro-rata share of USDC and a pROOK token.
However, blockchain data shows that these ROOK tokens were sold on decentralized exchanges for more than $450,000 worth of USDC.
“In order to maximize each ROOK governance token holder value, the multisig signers took the initiative to sell the ROOK received at the inception of Incubator DAO and from the pROOK exchange phase,” stated a member of the Incubator DAO in a July 23 proposal, describing the sale as an “unanticipated opportunity.
The funds are now part of the Incubator DAO treasury and some of these funds will be distributed to holders after distributing $130,000 as compensation to Incubator DAO members who wrote and executed the contracts for the distribution of pROOK.
The proposal also imposes a deadline on Sept. 10 for holders to exchange their tokens for their share of the unclaimed treasury, after which the Incubator DAO will be shut down. Any USDC remaining on the contract after this date will be withdrawn by those who control the multisig wallet, the proposal stated.
Some industry watchers took issue with an earlier version of the proposal, that has since been deleted, which described the multig signer sale of the ROOK tokens as one that was made to “willing buyers at the current fair market price.”
The only reason to make a process this convoluted and with this many arbitrary deadlines is collusion between leaders and those who are paying attention to governance in order to appropriate the funds of those not paying attention. pic.twitter.com/Ep0yZqqXJ3
— Spreek (@spreekaway) July 23, 2023
The initial timelines proposed in the first version of the proposal was met with criticism from the community, some of whom took issue with the fact that the multisig signers planned to take control of the funds that were not claimed.
“I think the signers for the holder dao got a bit ahead of themselves and I’ve been dming with them to fix this,” tweeted “@dcfgod,” who has advocated for the RFV Raiders on multiple occasions.
“In past crypto dao unwinds like ROME there’s still tons of capital in the redeem contract as dead capital, nearly a year later. Does the team just keep that for themselves? IMO no, it should get shared amongst everyone after some abnormally reasonable timeframe passes.”
Others suggested that the multisig signers claiming the funds was a suitable alternative to funds being locked up and lost in a contract forever.