--- title: DAOs & Rugpulls Tweet tags: --- Many projects have adopted 'DAO' as a last name - does this name-change really mean decentralization & transparency for you? Or are you still left to trust a team & be exposed to risk of rug-pulls? 🧐 Being a DAO is more than adopting 'DAO' as a last name. Here's why 👇 [...] With the rise of DeFi 2.0 DAOs, NFT-collector DAOs and 'Web3 crowdfunding', we see DAOs everywhere these days📈 These projects promise decentralization & transparency with semblances of community-driven governance (ERC-20 token + @discourse forum + @SnapshotLabs page + @gnosispm multi-sig) 🗳 In reality, we're still expected to trust the multi-sig signers to be good. Is this really enough to keep us safe? [...] ![](https://i.imgur.com/OopuCXH.png) In 2021, $2.8B worth of crypto was stolen by rug pulls according to @chainalysis. Among the top 10 rug-pulls, 2 projects with the last name 'DAO' contributed to ~$90M here 🥷 @AnubisDAO was a @olympusdao fork who raised $60M. 20 hours into the token sale, most of the liquidity was stolen & transferred elsewhere 💸 https://decrypt.co/84924/anubisdao-investors-lose-60-million-in-alleged-rug-pull [...] @AnubisDAO is not the first & neither the last to promise decentralisation & transparency through adopting a 'DAO'. AnubisDAO aside, what about other projects without a 'DAO' last name, who also have a ERC-20 token + @discourse forum + @SnapshotLabs page + @gnosispm multi-sig? Why did the governance setup not prevent the rug-pull? 🤔 [...] That's because the funds are ultimately controlled by the few owners on a Gnosis multi-sig Safe. When they have disincentives to do bad (e.g. reputation), the setup can work. Otherwise, the team can do anything with your funds & everything that can go wrong, will go wrong. Drain liquidity, dump coins, send funds to @TornadoCash🌪 If a core team's promises & the current 'DAO setup' is insufficient, is there a better way? [...] The better way is a Moloch DAO accessible by @nowdaoit's UI. When you yeet funds to a project's Moloch DAO, you can rage quit & withdraw your funds at anytime. If the team is doing something suspicious, leave the DAO with your funds instead of watching the rug happen 💨 [...] This minimizes trust & risk while building transparency into any project, regardless whether they take the 'DAO' last name. The increased safety when funding & supporting projects should unlock more capital & contributors for the next generation of Web3 projects. That's why we created the Yeeter 👅 - A way for projects to raise funds & spin up a Moloch DAO in 1 step. More deets here https://twitter.com/nowdaoit/status/1483463416316579855?s=20