Centralized business structures are continuing to make their way into the decentralized finance (DeFi) sector.
Token developers Magic Internet Money (MIM) and SPELL have come up with a traditional regulatory structure to replace the stablecoin custodian DAO with a market capitalization of nearly $700 million.
In a forum post on forum.abracadabra.money, a project leader called on the Abracadabra DAO to support a “transfer of power” into a centralized entity complete with attorneys, jurisdictions, and people. entrusted.
The trappings of a traditional corporation seem to contrast with the concept of a DAO, a cryptocurrency-based form of business governance in which holders directly decide.
“While we are committed to decentralization, we have recognized the importance of introducing a certain degree of centralized regulatory structure. The aim here is not to disrupt the decentralized nature of Abracadabra; in fact, it’s to protect it,” wrote the AbracadabraTeam account.
The Abracadabra DAO is the latest cryptocurrency project to embrace the transition of decentralized governance to some degree of centralization, along with SushiSwap and others. Reasons for these transitions range from tight regulatory scrutiny to more mundane business concerns.
For the Abracadabra DAO, the publicly shared reasons seem to favor vanilla. AbracadabraTeam says the centralized entity will manage the DAO’s intellectual property as well as server costs “while keeping control in the hands of SPELL token holders.”
SPELL (Abracadabra DAO token) holders will vote on the project through three transition phases, starting with choosing a jurisdiction for the new entity. Four countries include Switzerland, Singapore, Malta and Bermuda.
Phases two and three will define what the new entity’s role will be and how it will operate.
