The young woman stares at you through a door. Her eyes narrow; her head lowers. Then a hand draws the door closed. Clearly, something sinister is afoot. It’s capitalism, a man’s reedy voice-over informs you.
After Aragon raised $25 million from its token launch in 2017, one of the first things they did with that money was commission a revolutionary-chic video with fat cigars, grainy samizdat, and a group of determined young people trekking Frodo-like towards a big blue blockchain door. It’s vaguely ridiculous, but also endearing. I feel wistful as I watch it. Here was Aragon in its youth. And now, it is on the verge of ending.
Joshua Tan leads research at Metagov, a governance research collective.
Two young hackers, Luis Cuende and Jorge Izquierdo, started Aragon on the heels of the first DAO. Aragon was the first DAO platform: a tool to help people start their own DAOs. Riding a surge of enthusiasm for crypto, they crowdfunded a bunch of cash and produced some code. The code managed to get some stuff done, like secure Lido’s governance and thus effectively a third of all stake on Ethereum. But team turnover, governance paralysis, and operational missteps caused the product to fall behind the rest of the industry.
While the product foundered, funds from the token launch were managed by the Aragon Association, a Swiss nonprofit, and grew to over $200 million in value due to the rally in eth. During a planned governance transition from the Aragon Association to the Aragon DAO, some activist investors (or “governance raiders,” as some like to call them) bought up control of the DAO and started lobbying for the liquidation of the treasury controlled by the nonprofit. This attack — exacerbated by internal tensions in the nonprofit board — triggered some complex legal and financial maneuvers, resulting recently in the exit of about $75 million from the ecosystem as well as the effective liquidation of the nonprofit, the DAO and the token. For now, a diminished Aragon lives on in the form of a new nonprofit to be funded by a reserve of funds from the liquidation.
How did Aragon get here?
In one telling, Aragon is the story of how a group of kids learned the hard way that building a new world order isn’t quite as straightforward as writing a white paper or cutting a slick video….
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