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The Decentraland DAO is considering suspending payments as FTX falls

The Decentraland DAO is voting on whether to temporarily halt its grants program and reassess its structure.

On Wednesday, the Senate passed a motion that prompted concerns about the company’s treasury assets and the absence of grant rules. To make changes or add new features to the platform, any member of the community can submit a request for financial support.

The suggestion acknowledges that the awards program has been a terrific addition to Decentraland, but suggests pausing to “reconsider its existing structure.

The plan says the DAO treasury owns $19.3 million, with 99.1% in MANA, Decentraland’s native cryptocurrency, and 0.9% in “other” tokens.

In the suggestion, FTX, a collapsed bitcoin exchange, and the risks it took just before filing for bankruptcy are discussed. The existence of billions of dollars worth of FTT on the balance sheet of FTX’s sister company, Alameda, was discovered last week by CoinDesk, indicating an unusually close relationship between the two firms and raising concerns about its precarious foundations.

Overexposing treasuries and assets to a single asset as your principal source of funding and liquidity is a concern, the suggestion states.

MANA lost 34% of its value in the previous month, trading at $0.41. According to the suggestion, more grants could improve token sales.

According to the DAO’s treasury website, the awards program has funded 124 grants totaling $7.5 million. The delay would let the DAO diversify its coffers, examine its grants model, and develop a roadmap.

Co-founder Sean Ellul has said, “FTX has shown our entire industry that accountability, diversification, transparency, and prudent and active risk management protocols are an absolute necessity that shouldn’t be ignored.”

A total of 222,000,000 MANA tokens will be invested into the DAO’s treasury over ten years. Sixty-one million tokens have been issued by the DAO.
As it stands, 62% of voters favor placing a pause.

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About MahKa

The Decentraland DAO is considering suspending payments as FTX fallsMahKa loves exploring the decentralized world. She writes about NFTs, the metaverse, Web3 and similar topics.

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