Lido DAO, the decentralized governance for Lido Finance, has begun voting on a proposed token sale to venture capital firm Dragonfly Capital, according to data from Snapshot.
This token sale is half of Lido’s proposed treasury diversification proposal. The complete plan is to sell 20 million Lido DAO (LDO) tokens at a flat rate of $1.45. Half of this allocation will go to Dragonfly if the vote passes.
The voting process for the proposal was split amid concerns over specific details of the VC deal. Lido’s original proposal stated that Dragonfly will not be required to lock up the tokens. This has led to considerable debate in the forum discussion about the proposal. The overwhelming majority of contributors to the debate have called for at least a one-year vesting period.
As for the Snapshot vote itself, DAO members have three choices: agree to the proposal as is, agree to the sale but with a one-year vesting period, or disagree with the proposal entirely.
The process began on Thursday with one address casting their 15 million LDO token power to back the proposal as is. This has created an 80% approval rate so far for the proposed token sale to Dragonfly without any lock-up.
Meanwhile, DAO members voting with a total of 3.4 million LDO are not in support of the proposal. This amounts to 18% of the votes cast as of the time of publishing.
Who's the whale backing the vote?
It's unclear if the tokens voting in favor of the sale have any connection to Dragonfly. According to Nansen CEO Alex Svanevik, the money that supported the vote originated from a wallet associated with trading firm Alameda Research. Yet he suggested that it could have come indirectly from any other firm via an over-the-counter trade.
Cobie, a well-known crypto investor and co-founder of Lido Finance, appeared to weigh in on the vote.
"VCs should be abstaining from any DAO votes to sell themselves tokens," he said on Twitter, "If the vote is 'Should we sell Misc Capital 10,000,000 tokens for $1?' Then Misc Capital should abstain from voting on this proposal. ... Right?"
He added that doing so would amount to "cronyism and pillaging."
We have reached out to Dragonfly and will update this story should we hear back.
The vote will end on July 25 and then the DAO will consider the other half of the treasury diversification plan. Lido’s plan is to liquidate 20 million LDO tokens to DAI stablecoin to secure two years of operating runway for the DAO.
Lido also has another treasury diversification proposal introduced in June. This proposal called for the sale of about half of the DAO’s ether (ETH) holdings. Lido’s treasury is currently worth $307 million. The reserve holds 157 million LDO ($266 million) as well as 20,940 ETH ($33.5 million) and 5,304 staked ETH ($7.9 million).
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