coindesk.com
NFT finance-focused crypto group FloorDAO “forked” into two separate entities this week in an effort to shake off activist investors who had amassed an influential stake of the project’s governance tokens.
FloorDAO, which seeks to build products for “NFT-Fi,” recently sent over $2.5 million of its treasury – in crypto tokens and NFTs – to a splinter group called FloorkDAO that was controlled by the activist investors. The investors quickly divided that sum amongst themselves in a redemption that valued each FLOOR token at nearly $5, up from $1.89 at the start of the year. The remaining FLOOR tokens are currently trading around $3.88, an indication of the value to those investors who did not choose to exit FloorDAO and instead retained their holdings.
The episode marks the latest example of activist crypto investors mounting campaigns to target so-called decentralized autonomous organizations, or DAOs, which have started to take on the s of what might be a primitive form of blockchain-based companies. The prize is that these DAOs often have sizable treasuries filled with proceeds from token sales and other sources; the activist investors try to snap up governance tokens priced below the estimated worth of the DAO's holdings and then push the target project to effectively buy them out at a better price.
This is possible because many DAOs treat their issued tokens as governance chips; the more chips one has, the more say they get in the DAO’s decision-making. Because many long-time holders don’t participate in project governance, the activists can more easily accumulate an influential stake.
In FloorDAO, their stake had grown large enough that the project’s most dedicated believers felt it was becoming impossible to get anything substantive done.
“FloorDAO has now successfully forked to allow members who are not aligned with the long-term vision of the DAO to exit,” a blog post from earlier this week said.