Are the new decentralized mechanisms and systems at their heart simply a euphemism for creating centralized control, with more steps involved? The drama surrounding Across Protocol is no less heated. Its $23 million DAO transfer to Risk Labs forces us to face some inconvenient truths about the state of DAO governance. We’ve been led to believe that DAOs are the transparent, democratic future. What is when this voting power is further concentrated, and the lines get really blurred between who are the “insiders” versus who are the “outsiders”? This isn’t simply the story of Across Protocol, it’s a canary in the coal mine for the nascent DAO ecosystem as a whole.
Is This Really Decentralization Theater?
Ogle’s accusations are damning. A "faux DAO," he calls it. That stings. The basis for the claim is extraordinarily alarming. Over half of the voting weight for the second proposal was from wallets associated with Hart Lambur and the Risk Labs team.
Think about it: if a traditional company's board of directors used company funds to buy up voting shares to approve a massive transfer of assets to a related entity, heads would roll. Why are we letting DAOs get away with being held to a lower standard? Lambur's denial and emphasis on Risk Labs’ non-profit status in the Cayman Islands are... well, they're not reassuring. Non-profit status does not guarantee that an organization does the right thing. Enron had a charitable foundation, too.
Broken Promises, Empty Guarantees?
The absence of clear, binding commitments or guarantees for how exactly the $23 million would be allocated and spent by Risk Labs is extremely alarming. In defending against Ogle’s claims, Gannett denied the existence of any formal contracts. Now, picture giving someone a blank check for that much without even a handshake deal in return. Would you do that?
This isn’t merely a call for fiscal conservatism. It’s a matter of trust. Moreover, DAOs are founded on the nebulous promise that they’re more transparent and accountable. When a once-in-a-generation financial decision is clouded in uncertainty, it quickly destroys the deep trust that so many worked hard to establish. These purported “secret agreements” between Risk Labs team members, suggested by on-chain data, just make things seem worse. It harkens back to the backroom deals in smoke filled rooms, exactly what DAOs were meant to destroy.
Who Polices the Decentralized Police?
The Across Protocol situation exposes a critical weakness in the DAO model: the lack of effective oversight. But who, if anyone, is holding DAOs accountable when things go awry? The community, in theory. But what’s the case when the community is divided, apathetic or without the technical know-how to parse complicated on-chain data?
We need to ask ourselves: Are current DAO governance mechanisms truly equipped to prevent abuse of power? Are voting rights distributed fairly? Are there sufficient checks to prevent conflicts of interest from spurring bad policy? Or are we simply creating new systems that reproduce the same old issues, just with a blockchain layer on top?
Consider the parallels to traditional finance. We have public utilities commissions, industry compliance officers, and independent third party monitors to ensure a level playing field. DAOs, to their core designs, are inherently opposed to centralized authority. That does not mean they should not be subject to scrutiny. Maybe what’s necessary is a new, decentralized, community-driven auditing system. Join us as we reimagine how we allocate political power. We should experiment with measures such as quadratic voting and other ways to make individual voices louder while making those of big token holders quieter. If you don’t, look forward to a lot more of this.
Lambur’s probing of Ogle’s credibility, bringing up her alleged conflicts of interest, is the classic deflection tactic. Even if he did, that doesn’t make his concerns any less valid. Focus on the substance of the allegations, not the identity of the messenger.
The ACX Binance listing allegations of insider trading—and the ensuing drama with ACX leadership—certainly helped foster a troubling atmosphere of distrust. Bryan Pellegrino’s accusation that Lambur likely had inside information is a very strong accusation to make. Lambur’s denial, as emphatic as it is, cannot take away the shadow of doubt. The timeline of Across’s communication with Binance, as noted by Pellegrino, deserves more scrutiny.
At the end of the day, the Across Protocol controversy should be a wake-up call. It’s an unfortunate but important reminder that decentralization is no silver bullet. It demands 24/7 attention, stringent governance infrastructures and ethical repurposing from every person involved in the enterprise. If we don’t right these wrongs, DAOs might just become more palaces for the rich. The hope of using transparency to improve democracy would quickly evaporate.
Let's not let that happen. Let's demand better. Together, let’s incubate DAOs that fire on all cylinders and fully harness their potential. Otherwise, we’re simply shuffling deck chairs on the Titanic.
