Home ยป Crypto investors earn $2.5M bounty for FloorDAO campaign.

Crypto investors earn $2.5M bounty for FloorDAO campaign.

Initially focused on NFT tools, FloorDAO's treasury attracted activist investors instead.

by V. Sinclair
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This week, the FloorDAO NFT finance-focused crypto organization “forked” into two distinct entities in a bid to oust activist investors who had built a sizable share in the project’s governance tokens.

Recently, FloorDAO, which aims to develop goods for “NFT-Fi,” donated more than $2.5 million of its treasury to a FloorkDAO splinter company that was controlled by the activist investors. The investors soon divided that money among themselves in a redemption, increasing the value of each FLOOR token from $1.89 at the beginning of the year to almost $5.

The value to those investors who chose to hang onto their FloorDAO investments rather than sell them off is demonstrated by the current market price of the remaining FLOOR tokens, which is currently $3.88.

The incident is the most recent instance of activist cryptocurrency investors launching campaigns against so-called decentralized autonomous organizations, or DAOs, which have begun to resemble what may be a very early stage of blockchain-based businesses. The benefit is that these DAOs frequently have substantial treasuries full of money raised from token sales and other sources.

Activist investors try to buy up governance tokens at prices below the estimated value of the DAO’s holdings and then pressure the target project to essentially buy them out at a lower cost.

This is possible because many DAOs employ the tokens they have issued as voting chips; the more chips a user holds, the more influence they have over the DAO’s decisions. Due to the fact that many long-term holders abstain from project governance, activists can more readily amass a significant interest.

Their investment in FloorDAO had risen to the point where even the most ardent supporters of the initiative began to worry that nothing significant could be accomplished.

According to a blog post from earlier this week, “FloorDAO has now successfully forked to allow members who are not aligned with the long-term vision of the DAO to exit.”

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