Andre is finally leaving the DeFi space, for good. (For those who don’t know what happens, here is a good summary)
While we all deeply appreciate what Andre has contributed to the industry, the same question comes back again and again — how can we increase transparency and accountability so that such an important figure can’t just quit out of a sudden?
See the price performances of Andre-contributed projects — those investors are definitely not happy:
It goes back to the point: key man risk and project governance.
Blockchain should enhance a better governance than the traditional world, given smart contract is a lower cost enforcement mechanism than our traditional legal system — while you may take years to get what you deserve in the court, your justice is executed by smart contracts instantly. However, the cost of constructing good governance is still high — with the immaturity of institutional standards and the disconnection of smart contract development experts and governance experts.
One simple example is SAFT (Simple Agreement for Future Tokens) — the standard way of how everyone invests in early stage token project. It originated from SAFE (Simple Agreement on Future Equity), a silicon valley standard of investing in seed to angel stage startups. However, the protection you could get as an investor to SAFT is much weaker than those you can get in SAFE. It’s all because everyone still signs SAFT black-and-white on paper instead of programming it on-chain.
Why? Because nobody thinks it worths to hire a smart contract auditor to ensure the integrity of the SAFT codes, not to mention the governance structure of the project or the DAO. But if you don’t set that up right at the beginning, then it will continue to add up till the tower falls.
How can the projects ensure smooth operations even after Andre leaving? How can they regain investors’ confidence? How can they prevent any more key man leaving? Is there a mechanism to maximise the cost of unprepared departure and minimise the impact of management changes?
We need a governance standard. We need some best practices. We need an easy-enough execution of that.
That’s why we created ADAM.
ADAM builds the standard of DAO 2.0 and innovates the DAO governance model. Read more on adamdao.io or follow ADAM DAO on Twitter.
