Aragon’s Treasury Discussion Turns Chaotic: 6 DAO Members Banned for Alleged ‘Coordinated’ Attack!

Aragon, the Decentralized Governance Project, Faces Controversy as Community Members Get Banished Amidst Financial Conspiracy Theories

Aragon, a decentralized autonomous organization (DAO) that builds software to support other DAOs, has banned at least six community members from its Discord server. According to Jessica Smith, Aragon’s head of communications, the ban was in response to “coordinated” actors flooding the server with “probing questions” and “inappropriate language” during a discussion about the project’s finances. Smith claimed that the influx of chatter and new members came during a pivotal but long-delayed effort to move Aragon’s sizable treasury under community control. Aragon’s response was to exile a raft of community members that had questioned its leadership, processes and status as a bona fide DAO.

The move has highlighted the uneasy tension between the “power to the people” illusion of a DAO and the reality that a few stakeholders often wield outsize influence. Aragon’s Discord moderators have the power to set (or rejigger) the conversation by banning dissenters and deleting their opinions, actions anathema to the idea of “censorship-resistant” cryptocurrency. Aragon’s own community of ANT holders voted nearly a year ago to have more direct influence over how the project spends its treasury, which holds cryptocurrencies worth more than $70 million. The transfer has been anything but smooth.

After months of delays and slow-walking, Aragon’s power brokers on Tuesday finally started moving money into a new structure under DAO control. Around the same time its moderators began banning seemingly anyone who questioned the project and its leadership. Smith asserted that the banned members had a history of “similar incidents” in other DAOs. She declined to provide further information on why Aragon believed the alleged behavior was being conducted by “coordinated” actors, but she said the intel came from a “trusted source.”

One common thread: Every banned member that CoinDesk spoke to is also a member of ROOK, which last month dissolved its DAO after activist investors called for the project to return capital to its token holders. This happened through a series of votes pertaining to its on-chain treasury. Smith said membership in ROOK DAO “was not the basis for the decision.” A Rook and Aragon DAO member who goes by the screen name CollinM11 said in a Twitter message that the mass ban started after a prominent member of the Rook community tipped Aragon’s Discord into a discussion of risk-free value, or RFV, better known in traditional finance (TradFi) circles as “book value.”

Wismerhill, an activist investor who championed Rook DAO’s collapse, said there are “zero similitudes between” Rook, a project whose product development has been stagnant for months, and Aragon, which is actively building and also has mechanisms to return value to its token holders. “Aragon is only interesting because they could do buybacks” of ANT tokens, he said. Wismerhill said he “got immediately banned while typing” after logging into the Discord Tuesday to catch up on the drama. Even so, not all of the exiles are as notorious as Wismerhill. Others are only occasional posters who said they were asking well-intentioned if pointed questions about Aragon’s timeline. Smith said the bans are temporary but did not give a timeline on reinstatement. She declined further comment.

The incident raises questions about the governance of DAOs and how they handle dissenting voices. As DAOs continue to grow in popularity, it is important for their leaders to consider the principles of decentralization and censorship-resistance that underpin the technology. While it is understandable that Aragon would want to protect its community from coordinated attacks, the mass ban of community members who were merely asking questions sends a concerning message about the state of DAO governance. As DAOs continue to evolve, it will be interesting to see how they address these challenges and maintain their commitment to decentralization and transparency.

Martin Reid

Martin Reid

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