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title: DAOs & Rugpulls Tweet

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title: DAOs & Rugpulls Tweet
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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

