A New Chapter for the Aragon Project

We have an important update for all stakeholders of the Aragon Project. 

The Aragon Association (AA), the legal steward of the Aragon treasury, assets, and mission, has passed the following resolution:

1. Deploy most of the treasury to allow all ANT holders to redeem their ANT for ETH;
2. Dissolve the AA; 
3. Continue the mission in a product-focused structure. 

Token holders can redeem their ANT for ETH at a fixed rate of 0.0025376 ETH / ANT. The AA is deploying 86,343 ETH to a redemption contract for this purpose on Ethereum mainnet. Token holders can participate in the redemption here. The smart contract deployment in Etherescan can be consulted here.

The AA arrived at the best redemption rate it could achieve for all ANT holders by identifying the most compliant and tax efficient path forward allowing for the continuation and protection of the project. This decision could not be put to a public vote due to legal constraints, specifically regulatory risks triggered by token speculation and market manipulation. The discussions in the Aragon Forum were considered in the decision.

Aragon was founded in 2016 with the mission to create better organizations that are onchain, borderless, and transparent. Since then, Aragon popularized DAOs, taking them to their first $1bn in AUM across thousands of deployments. 

In 2017, Aragon raised 275,000 ETH (approx. $25m) with the ANT sale. The ambition for ANT was bold: a token to be used in a dispute resolution system within a new digital jurisdiction, the Aragon Network. The Fight for Freedom video brought together some of the most talented developers in the industry to build towards this vision. 

Aragon kickstarted its grants program, Aragon Nest, in 2018. It was the second grants program to be launched in the Ethereum ecosystem, just after the Ethereum Foundation’s, seeding projects like DAppNode and Frame. It also funded Prysmatic Labs to work on the first Ethereum 2.0 client, Prysm.

Meanwhile, the early Aragon team built the majority of the tooling from scratch. From the world’s first decentralized frontend, to Ethereum’s first on-chain package manager, to aragonOS – a DAO framework to experiment with governance at the speed of software. Today, aragonOS powers DAOs that are fundamental to Ethereum, such as Lido and Curve, helping these projects govern more than $16bn in assets.

We succeeded at many things, and failed at others.

We tried, and failed, to launch a court system to allow DAOs to leverage human judgment.

We tried, and failed, to launch an appchain on Cosmos when Ethereum gas fees threatened product adoption.

We tried, and failed, to find a way to turn a DAO framework from a common good into a protocol with value capture.

The AA was created to oversee the project’s treasury, assets, and multiple teams. We attempted to balance these obligations by giving ANT holders and the community more control over the project. The AA’s purpose was always to sustainably support the Aragon mission.

Over the course of several years the AA experimented with different governance initiatives, such as decentralizing the project with multiple teams, implementing an Aragon Governance Proposal process, and creating a parallel optimistic governance DAO for the community. While the treasury grew significantly after several bull markets, bureaucratic complexity, misaligned stakeholders, and failed attempts at modifying the governance increased tensions within the project.

This led the AA to a rushed attempt to vest control of the treasury directly in the hands of ANT holders. However, too few ANT was in the hands of users, partners, and builders after years of product pivots, and a volatile gap existed between the value of the treasury and the token market cap. This put Aragon's mission in jeopardy.

Rather than continuing down the current path, after several months of deep introspection we have concluded that the shaky foundations underlying the current structure cannot be fixed and have been holding back the project for too long. Neither the AA nor ANT are currently suited to govern the project. A fresh start is needed and nothing short of a total reset will do.

It’s time for a new chapter that will not only safeguard, but advance the project’s mission, under new leadership and a leaner product-focused structure. 

The Aragon Association has passed the following resolution:

1. Deploy most of the treasury to allow all token holders to redeem their ANT for ETH – sending 86,343 ETH to a redemption contract (≈ 87% of treasury held in non-native assets);
2. Dissolve the AA – committing $11m USD to cover outstanding obligations and mitigate against regulatory uncertainty; 
3. Continue the mission in a product-focused structure – committing remaining funds to product development.

1. Deploy most of the treasury to allow all token holders to redeem their ANT for ETH

The AA has decided to deploy 86,343 ETH to offer all ANT holders the opportunity to redeem their ANT for ETH at a fixed rate of 0.0025376 ETH / ANT. The objective of this initiative is to redeem all outstanding circulating supply.

The AA will send the assets to a smart contract that will autonomously allow all ANT holders to execute the redemption transparently onchain over the course of 12 months. No further funds will be sent to the Aragon DAO. From this moment forward, there is no purpose in continuing to hold ANT.

At the end of the redemption period, the redeemed ANT will be burnt and any remaining ETH will be sent to the Ethereum address of the new product-focused structure. The funds will be allocated to advancing the mission via Aragon OSx development. Token holders can participate in the redemption here. The smart contract audit report and deployment in Etherescan can be consulted here. Questions regarding ANT redemption can be directed to ant@aragon.org.

Over the course of the next 12 months, frequent communications via multiple channels will be issued, including working with exchanges, onchain notifications, social media, the Aragon website, and weekly newsletters. Token holders have until November 2nd 2024 23:59 UTC to redeem their ANT for ETH. After this date, redeeming will no longer be an option and no more token redemptions will be carried out.

2. Dissolve the AA 

The AA has approved a full liquidation and dissolution. None of the association members will have a role in the future of the project. 

$11m will be safeguarded by the Aragon Shield Foundation (ASF) to cover outstanding obligations after the AA’s dissolution and mitigate against regulatory uncertainty. The funds will be held for a limited period of time and overseen by the ASF, a Swiss foundation that is immutably bound to Aragon’s mission and reports to a supervisory authority.

Any unused funds will be sent to the new product-focused structure, in order to fund project continuity and to comply with tax regulations.

3. Continue the mission in a product-focused structure

The Aragon Project’s mission is to provide the most flexible and secure tools for creating and managing decentralized organizations, allowing everyone to experiment with governance at the speed of software. In order to continue advancing this mission, the IP, critical infrastructure, and operational runway will be transferred to a new product-focused structure:

• A Product Council that will receive and allocate resources; and
• A company composed of the current Aragon OSx team that will continue product development. 

The Product Council will be made of product stakeholders that are industry experts who will guide the development and governance of Aragon’s DAO framework. It will be seeded by a representative of Aragon Shield Foundation and a representative of the Aragon OSx team. To start, the Product Council will operate as a multisig, wrapped in a non-profit association, using the Aragon App.

The participation criteria for the new Product Council will be:

• Ethereum infrastructure builders;
• Experience building on, supporting, using, or integrating with Aragon products.

Outreach and recruitment will begin shortly. Any ANT holder who meets the above mentioned criteria and is interested in participating in the Product Council can also reach out here.

For builders and developers, this changes nothing. The Aragon Project will continue its mission by doubling down on building resilient onchain governance tooling and infrastructure.

In March 2023, the Aragon team launched a new end-to-end tech stack. Aragon OSx is a permission management framework, with a secure vault at its core and modular plugin architecture. Aragon App is a user interface that enables anyone to deploy and manage a DAO with no code. The developer tools allow the ecosystem to extend and build on the stack to create novel and custom applications.

Restructuring to a product-focused set up will enable those who are most aligned with the project’s mission—its users and partners—to take a leading role. The goal of this new structure is to set a solid foundation for success, by onboarding Product Council members who are long-term users of Aragon’s DAO framework and partners who align with the project’s values.

The Product Council will advise on product development priorities, allocate funds, and oversee the governance of Aragon OSx. By creating a structure where decision-making is in the hands of those who are most directly affected, Aragon will be in a better position to serve industry needs and achieve long-term success.

By looking at the project’s origins, failures, and accomplishments, and taking these actions, we believe Aragon will be successful in putting the project back into the hands of developers and product stakeholders and pushing the mission forward, with an unwavering focus on building a resilient DAO framework for Ethereum and beyond.

We understand this fundamentally changes the relationship between ANT and the project. We want to thank those of you who have supported the project during all these years, and who have helped Aragon build impactful technology. 

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For media inquiries regarding this announcement, the Aragon Association, and the Aragon Network Token (ANT) please contact aragon@wachsman.com.