Well, you’d say this is just me following the same route as many other people. But at least, there are two differences; first, I cared to explain and even more importantly, I did it for a different reason…probably.
Ok, just in case you’re living under a rock and missed the news, here’s me telling you that arguably the biggest L-2 network in the crypto space just airdropped over 40% of its governance tokens to early adopters and DAOs on the network. Thing is, you wouldn’t be reading this if you are living under a rock, but that’s fine…
Alright, I planned to make this a short one so everyone can return to watching the charts. So, first of all, I was awarded a (whooping) 625 ARB token for basically interacting with the Sperax stablecoin project on the Arbitrum network. Second, I sold all tokens at 4$ each, and the funds have been sitting in stablecoins; USDT to be precise.
Why did I do this, now if I wanted quick cash, I’d already be at the closest stores throwing a few things into my cart. But this is not the case.
Before moving further, I’d like to express my dismay at how the whole DAO concept has been riddled in crypto. If there’s anything DAOs represent, decentralization isn’t one of them, at least not currently. I will desist from giving clear examples but a good number of DAO decisions have been trumped by some ‘rich folks’ with tons of governance tokens, enough to change the decisions of the rest of the community.
Tokenizing the DAO is a brilliant idea, but giving room for unlimited possession and unlimited selling of DAO tokens gives room for the one thing the whole crypto space tries to prevent. The blame is spread two ways. The DAO project and the community.
On the side of the community, the treatment given to DAO tokens is proof that 99% of participants in the crypto space are only here for quick bucks. Exchanges would rush to list these tokens to benefit from the huge volume that comes from the first two months of trading. This is fine, exchanges need money to run.
Holders of the DAO tokens, especially ones given out as airdrops are also quick to dump their ‘share of the governance’ on the exchanges and pay a little fee in trading fees. No loss, it was free anyways.
On the side of the project, it will be cool to experiment with issuing these free tokens as real governance tokens (Ve tokens). By this, beneficiaries will be unable to sell these tokens immediately. Tokens can be unlocked periodically or based on other factors like the number of proposals the receiver has voted on. This will enable DAOs to function. To prevent centralization, a smart contract that limits the vote amount for every individual wallet can be added to DAO smart contracts.
Pouring new governance out there hasn’t helped and these tokens just go worthless once the beneficiaries are done selling. Entities who manage to get hold of enough tokens at the lowest price proceeds to own the DAO.
Back to my decision to sell, you probably figure out why already. But the real reason is, I traded my tokens in expectation of the market going the usual way. Arbitrum, for me, is an interesting project, one I’d like to have a say in. So this is it, once the ARB market comes crashing, I will be putting the USDT back in. Had to shun USDC since the US banks are still sorting themselves.
Just FYI, this decision was made out of experience. Multiple times I’ve received DAO tokens, kept them, and watched them get worthless in price while the DAO becomes centralized by the ‘money bags’. This is not the usual article where I ask you what you did with your airdrop, maybe because I don’t care what you do with them anymore. But still, you can feel free to share how you managed your Arbitrum tokens.
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