Dear Ethicist, what do we do about Aragon?

Hi folks, Josh here from Metagov. I recently came back here to give an update on a recent grant, and after a lot of reading and talking to folks, I am just trying to come to grips with the crossroads that this community is coming to. To put it starkly: there’s a real possibility that Aragon might effectively dissolve or become very much diminished, with ~100 million USD flowing out of the treasury and likely out of the ecosystem.

As a researcher of DAOs and governance more generally, I find this situation super interesting. It’s related to similar challenges at DAOs like (the now-defunct) DXdao. But it’s also a bit sad for those of us who are fans of Aragon and believe in its mission.

I just wanted to pose two questions from the perspective of ethics—of what should be the case. Think of it as a request for comment, in the style of an Ethicist column.

What is owed to the mission, and what is owed to token holders?

The Aragon Association is a nonprofit, with a mission to build tools and infrastructure for DAOs and digital organizations. Like most nonprofits, it has a board that makes choices about how to execute that mission, along with a core team that does the work.

Usually, nonprofits are not in a position to be performing buybacks, much less at the scale of hundreds of millions of dollars.

But also, nonprofits shouldn’t rug their contributors.

And to speak the quiet part out loud, nonprofit boards are typically not invested in the financial performance of the organizations they steward.

So how do we balance these interests? What does AA owe to the token holders in Aragon DAO? Asked less often, but still important: what do token holders in a particular smart contract owe to the mission of AA, a Swiss legal entity? Does that smart contract have a mission, too?

I honestly do not know.

I do know that there is plenty of discussion on financial maneuvers and on legal constraints. But where has this community talked about what it owes to itself, about its values, about the legitimacy of the board and the legitimacy of the DAO? Why does Aragon exist? Aren’t these discussions, too, a part of governance?

What is the best possible governance that will serve the mission?

Aragon has a token, with all that entails. Plenty has been said about the limits of one-token-one-vote. Plenty more has been said about the limits of board-based governance. In the best-case scenario, these two systems can complement each other, as it does in certain Web3 projects and in many good-old-fashioned corporations.

There’s plenty of debate on the effectiveness of Aragon in realizing its mission (and, implicitly, of Aragon’s governance) over the past several years. To be fair, these debates go to the heart of not only this community’s present troubles but of the entire DAO ecosystem’s troubles—and its potential. Great tech doesn’t usually get built without years of failure and many, many pivots.

For people who build DAOs because they believe in digital and collective governance, the question is not “do DAOs work” but “how can we make DAOs work in the future“. For the people who built Aragon because they believed in its mission and vision, the question should not be “does Aragon work” but “how can we make Aragon work in the future”.

One last thing. In my role at DAOstar, I nominally represent the DAO ecosystem. And the dissolution or diminishment of Aragon would be bad for the ecosystem. It would be bad for DAOs. And if that is what is at stake, then I think the whole of this ecosystem should be here.

We should say something.


Problem is if the token value is neglected it will drop a lot - allowing people to influence the vote of the dao, if the market cap of the token becomes 5M, and it controls the vote of a 200M treasury, what do you suppose will happen?

A full dissolution is not something i support either, and i dont think it requires hundreds of millions of buybacks to solve this issue. It is a messaging issue, a much smaller buyback(10-30m) will have tremendous impact - and it will show people that if the token is severely undervalued it will be protected, others will then come in with that backdrop in mind. Once a message is sent. Again it does not have to be a buyback, it could be the proposed RAMOS system - or a way to incentivise wANT - but anyhow there needs to be a show of force for preserving the book value of ANT - otherwise who will govern the treasury?

Issuing a token that controls the dao/treasury spend then rugging those governance rights also would be a major red flag in any country

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another thing to note, as ARAGON DAO we should be setting an example for other Daos, who would align with our values if it destroys all value for the tokenholder. If they did not want tokenholders to have power then they should have never issued one in the first place.

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Your reasoning has many blind corners. The ICO raised money on the basis that value created by the Aragon Network would accrue to token holders. See the chart here:

This is the crypto world, people don’t hand out 25M$ of their money for the love of an idea. I’m a bit sick of hearing people in the space who are flush with others money come tell us about their hippie beliefs regarding crypto.

Anyway, back to the point:

The Aragon Association has now had 6 years to work on its products. There has been mainly drama, churn and still no product that corresponds to the ICO promise – a governance network that would accrue value to ANT token holders.

There is still absolutely no idea or research regarding how to generate monetary value to sustain the treasury, aside from “we’re lucky that our crypto goes up, lol”.

Big DAOs aren’t considering Aragon anymore for their governance:

Given that, with all of this money, and time spent, we still have no product-market fit, well, maybe it’s time to give an exit option to the token holders? A very common model exists for this: Voice or Exit - which has been at the core of crypto from the start.

Aragon Network isn’t performing the way you wanted it to? Then you can discuss, here, on the discord, at conferences, how to fix things. Or ask for your share of the treasury, and leave. As far as “ethics” are concerned, this is pretty straightforward, no need for pilpul and endless discussions about it.

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Could you please point towards where this was discussed - I cannot find anything about value accrual to the token holders.

There are plenty of ideas on how to accrue value - some advanced, some less so. To your point though, there is no product-market-fit so focusing on that feels like a higher order priority than stimulating each other intellectually on tokenomics. You can’t have value accrual before value creation. To have paying users you first need users, I am sure you get the point.

We do recognize that organizations with billions of AUM require high degree of customization, which is part of the motivation behind our experts program and also the reason we have released the most modular permission management stack. Someone attempting to dunk on their bigger competitor in response to being criticized for over-relying on a multisig is not the most robust data point.

I think this is a valid point. Why did token holders decide to keep going in 2020/2021 when most of the team walked away from the project and what has changed since then, other than the fact that today we have a team that has released a product.

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Thank you for bringing a balanced view and introducing an important nuance, which so far has been overlooked!

For context, here is the states mission of AA:

" Develop the Aragon project, which aims to disintermediate the creation and maintenance of organizational structures using blockchain technology to build the necessary software and tools. These tools and infrastructure empower developers to build functionality and applications for the next generation of decentralized organizations and give people across the world the opportunity to easily, transparently and securely manage their organizations, enabling a borderless, permissionless and more efficient creation of value."

Disclaimer: I personally know Josh and periodically volunteer at DAOstar


can we actually see the bylaws, the actual document rather than a quote?

also how would you solve the issue around devaluation of the tokens and making voting power so concentrated and attack vector

The AoA were shared here in April 22.

EDIT: as Yakitori pointed out, the google drive link of the legacy AoA is not accessible. Pinned the file in IPFS here.

They were amended in January 23 to update Article 7 - Convocation of the General Meeting. You can find the document with changes highlighted here.



For me this is the critical part. Fortunately, a massive treasury allows for many pivots. Unfortunately, a massive treasury allows for many pivots without having to confront the market. The reality is that a startup/early stage project needs to constantly confront the market, and not build in a vacuum. This has been historically extremely hard for Aragon because of its treasury. It’s a blessing and a curse.


Great point - to me it is much like zirp era, where when capital is flush, focus is blunt and direction is chaotic.