3 - 5 minute read
Rook, a crypto project building tools for capturing maximal extractable value (MEV) on Ethereum, is undergoing a transformation of power. A proposal to split 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 seeks to divorce the project’s tech from its governance token.
After weeks of intense debates on Discord, the proposal offers a compromise between a team eager to continue building and token holders who feel ignored. Rook DAO, the decentralized autonomous organization (DAO) behind Rook, has not had much to govern in over a year, insiders told CoinDesk.
What is the Proposal about?
The Rook Labs’ proposal envisions splitting Rook’s treasury and allowing the MEV tech builders to continue under the Rook Labs, while a new community-run entity called Incubator DAO will control half of Rook’s funds. It will be fully independent from Rook, and its members will make decisions on everything from the project’s name to how to spend its almost-$25 million stash.
Incubator DAO will inherit the old DAO’s unique representative democracy structure, relying on four elected “sophons” to vet proposals. All four winners have supported a plan to return the $25 million to token holders.
According to Wismerhill, one of the loudest voices calling for change and a sophon in the new DAO, “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.”
While token holders can rest easy, the new structure enables builders to continue delivering product enhancements through Rook Labs. However, the Rook DAO will cease operations, and ownership of Rook will transfer to the Incubator DAO; hence, members of the newly-created DAO will control half of Rook’s funds.
Rook Token Price
The Rook token price has nearly tripled in value since late March, with the token trading above $40 early Monday, up 10% in the last 24 hours. The rising token price and debate over the future of the project have 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. Some members of TempleDAO supported a solution that would enable the Rook team to continue their important work in peace with a unified community.
Despite the debate, it’s worth noting that both token holders and developers win in this transformation of power. Token holders will have considerable control over how Rook’s treasury is managed and the future direction of the project, while developers will have access to adequate capital to continue innovating.
The Bottom Line
The transformation of power at Rook has significant implications for the future of Rook’s MEV operations on Ethereum. Still, the proposal offers a detenté between a team eager to build unmolested and token holders who feel ignored. Token holders are urged to hold onto their Rook tokens as the price is likely to increase further with the new changes taking effect.