Aragon Bans at Least 6 DAO Members During Treasury Discussion, Alleging ‘Coordinated’ Assault

Their banishment from Aragon’s Discord for asking “probing questions” and using “inappropriate language” highlights the disconnect between the censorship-resistant ideals of crypto governance and the reality that insiders hold considerable sway.

AccessTimeIconMay 3, 2023 at 7:19 p.m. UTC
Updated Sep 29, 2023 at 3:32 p.m. UTC

Decentralized governance project Aragon banished at least half a dozen community members from its town square this week as a discussion of the project’s finances turned sour and tipped into conspiracy.

“Coordinated” actors flooded Aragon’s Discord server with “probing questions” and “inappropriate language” on Tuesday, Aragon’s head of communications, Jessica Smith, told CoinDesk in an email. The influx of chatter and new members came during a pivotal but long-delayed effort to move Aragon’s sizable treasury under community control.

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  • “We have reason to believe these actors are coordinated and connected to past governance interventions in other DAOs,” Smith said, without elaborating on either claim. “Therefore, we decided to act swiftly but temporarily to keep our community safe.”

    Aragon’s response was to exile a raft of community members that had questioned its leadership, processes and status as a bona fide decentralized autonomous organization (DAO). CoinDesk spoke to seven community members caught up in the ban, most of whom said they were investors in ANT (and therefore DAO members), months-long members of the Discord or both.

    By smashing the banhammer button on its own voters, Aragon 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 DAO building DAOs

    Aragon builds software to support DAOs, crypto clubs where token owners have a say in business decisions. 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.

    In an email Smith asserted 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.”

    The ROOK Connection

    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.”

    “Basically, it is used in [decentralized finance, or DeFi] when a token has a larger treasury than market cap,” said the activist investor with the screen name Wismerhill, who championed Rook DAO’s collapse. “Aka team is either destroying value/or siphoning DAO controlled resources to the end of time.”

    Wismerhill 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. After all, the treasury transfers were first authorized nearly a year ago.

    Smith said the bans are temporary but did not give a timeline on reinstatement. She declined further comment.

    Edited by Nick Baker.


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    Danny Nelson

    Danny is CoinDesk's Managing Editor for Data & Tokens. He owns BTC, ETH and SOL.