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Bankless controversy forces founders to burn tokens and separate from DAO

The Cointelegraph ​

Cryptocoins News / The Cointelegraph ​ 85 Views

The co-founders of crypto media Bankless are seeking to separate their brand from BanklessDAO two years after its launch.

Amid the ongoing controversy around cryptocurrency media Bankless and the associated decentralized autonomous organization (DAO), BanklessDAO, the founders of Bankless have suggested separating the brand from the DAO.

Bankless co-founders David Hoffman and Ryan Sean Adams plan to submit a governance proposal to BanklessDAO to separate the two entities. The co-founders took to X (formerly Twitter) on Nov. 26 to announce that they also plan to burn all of their BanklessDAO (BANK) tokens on the back of this proposal.

Hoffman and Adams’ decision to separate Bankless from BanklessDAO came in response to community criticism of BanklessDAO’s application for a grant from Arbitrum. Filed on Nov. 20, the application asked for 1.82 million Arbitrum (ARB) tokens from Arbitrum, a layer-2 scaling project for the Ethereum blockchain. The amount is worth around $1.8 million at the time of writing, according to data from CoinGecko.

“The concern is that BanklessDAO would not be able to make such ambitious proposals without leveraging the weight of the Bankless brand, which they did not produce, is not theirs, and ought not to benefit from,” Hoffman wrote.

The BanklessDAO community was quick to criticize the initiative, with many DAO members pointing out that the proposal requested almost two million ARB for writing content without providing detailed information about how the money would be spent. In response, BanklessDAO committed to revising the proposal to cut the one-year grant to three months and provide clear key performance indicators and milestones.

BanklessDAO’s education and onboarding campaign for Arbitrum. Source: Arbitrum Foundation

The argument between the proposal backers and opponents escalated rapidly on social media. Some commentators like pseudonymous Delegate Cash CEO Foobar accused Bankless founders of “legitimacy grifting” by pretending that BanklessDAO was completely unrelated to Bankless.

Some Bitcoin (BTC) enthusiasts like Pledditor also criticized the Bankless founders for claiming “they aren’t grifters,” referring to Hoffman and Adams promoting projects like Nexo. “They later clarified that they were paid 31k to shill Nexo, not 250k,” Pledditor wrote.

Related: Azuki DAO rebrands to ‘Bean’ as it drops lawsuit against founder

Bankless co-founder Adams addressed the criticism, stressing that calling creators grifters for running ads is essentially trying to consume products for free. He also stated that paid subscribers have always funded the mission of Bankless.

Founded in 2019, Bankless is a crypto media company that promotes the adoption and awareness of bankless money systems. In May 2021, Bankless launched Bankless DAO — a decentralized community to coordinate and promote bankless media — and launched the BANK token.

In April 2023, Bankless founders announced they were raising a $35 million venture capital fund to invest in seed-stage Web3 companies.

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