A profound change to the levers of power at Rook, a crypto project building tools for capturing maximal extractable value (MEV) on Ethereum, is hurtling toward passage.
A vote ending Tuesday seeks to divorce the project’s tech from its governance token. Written by Rook Labs, the proposal envisions splitting Rook’s nearly $50 million crypto treasury in half between the key builders of Rook tech and a new community-run entity called Incubator DAO.
After weeks of contentious Discord debates, the proposal offers a detenté between a team eager to build unmolested and token holders who feel ignored – despite their nominal governance powers. Rook DAO, the decentralized autonomous organization (DAO) behind Rook, hasn’t had much to govern in over a year, insiders told CoinDesk.
Incubator DAO will all but replace Rook DAO, according to public messages and plans reviewed by CoinDesk. It will be fully independent from Rook, meaning its members will get to decide on everything from the project’s name to how to spend its almost-$25 million stash. The project called Rook – which builds technology to capture MEV, or value from the Ethereum transaction chain – will continue under Rook Labs with its multisig signers controlling the remaining treasury.
In addition to getting half of Rook’s funds, the Incubator DAO is set to inherit the old DAO’s unique representative democracy structure. It relies on four elected “sophons” to vet proposals, and new elections have already been held. All four winners have supported a plan to return the $25 million to token holders.
“Given the governance process in place at Rook DAO, and the inability to accrue value to the ROOK token, I think this is the best compromise we could get for token holders,” the pseudonymous Wismerhill, one of the loudest voices calling for change and a sophon in the new DAO, said in an interview.
“It is a win-win,” Wismerhill added. “Rook Labs has sufficient capital to develop the products, and holders don’t have to hold a worthless governance token that was progressively ignored by the protocol.”
The token itself has nearly tripled in value since late March, when Rook Labs’ pseudonymous CEO, Hazard, told the DAO he couldn’t share the project roadmap. It was trading above $40 early Monday, up 10% in the last 24 hours.
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ROOK’s rising token price and debate over the future of the project has attracted investors of many stripes, some of whom have voted with newly-acquired bags. In the poll to create Incubator DAO, the single-largest “yea” position – nearly 15,000 ROOK – was voted by a wallet controlled by insiders at crypto yield project TempleDAO.
“We would love to see a solution that would allow the Rook Team to continue their important work in peace with a unified community,” the pseudonymous head of TempleDAO, Lux.Temple, told CoinDesk in a Telegram message.
But the TempleDAO wallet isn’t waiting around to find out what happens. It’s already started selling some of its ROOK tokens on decentralized finance (DeFi) exchanges.