This week, the crypto group FloorDAO, which focuses on NFT finance, “forked” into two distinct entities as a way to distance themselves from activist investors who had gained significant control over the project’s governance tokens.
FloorDAO, whose aim is to create products for the “NFT-Fi” sector, transferred over $2.5 million worth of crypto tokens and NFTs from its treasury to a breakaway faction called FloorkDAO, which was under the control of these activist investors.
These investors promptly divided the funds among themselves, resulting in each FLOOR token being valued at nearly $5.
The token’s value at the start of the year was $1.89, and it has since experienced a substantial increase.
As for the FLOOR tokens that investors chose to keep within FloorDAO instead of selling when exiting the project, they are presently trading at around $3.88. This demonstrates the value these tokens hold for those who decided to remain invested.
The so-called DAOs are the latest example of activist crypto investors mounting campaigns and the prize is that these DAOs have decent treasuries filled with profits from token sales & other sources.
The activist investors try to take advantage of governance tokens priced low from the estimated value of DAO’s holdings and then push the target project to successfully buy them out at a better price.
This is possible because many DAOs consider their tokens as a form of governance power. The greater the number of tokens an individual possesses, the more influence they have in determining the DAO’s actions.
Since many long-term token holders tend not to actively engage in the project’s decision-making, activists can more readily amass a significant and impactful ownership stake.
In the case of FloorDAO, these activists had gathered so many tokens that the most committed supporters of the project started to feel that it was becoming very difficult to make any meaningful progress or decisions within the organization.
“FloorDAO has now successfully forked to allow members who are not aligned with the long-term vision of the DAO to exit,” a blog post from earlier this week said.