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The State of DAO M&A

Published

5 дней ago

13 марта, 2025

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In late 2021, two DeFi DAOs — Fei Protocol and Rari Capital — embarked on what was supposed to be a transformative merger. The idea was simple: Fei, with its algorithmic stablecoin, would join forces with Rari, a pioneer in permissionless lending pools, to create a DeFi powerhouse governed by a single DAO. Their communities approved the merger with overwhelming support, and in December, Tribe DAO was born.

Nine months later, it was dead.

The Fei-Rari collapse sent shockwaves through the ecosystem, but it was hardly the only DAO M&A, even in 2021. Gnosis and xDAI (a qualified success), Aragon and Vocdoni (a middling failure), Yearn and Cream/Sushi/Pickle (hard to tell) all came together. Since 2020, more than 65 deals have been executed by DAOs looking to scale, merge or consolidate. Today, the state of DAO M&A is more vibrant than ever.

Traditional M&A has clear playbooks. Corporate boards negotiate deals, investment banks structure financing, and legal teams ensure compliance. But DAOs have been operating in uncharted waters. Governance is chaotic. There’s no CEO to sign off on a deal, and token holders vote, often with unpredictable outcomes. Or they learn about it after the fact, as with Aragon’s community.

As we discovered in writing the State of DAO M&A report: valuations are murky, as DAO tokens fluctuate wildly, making it difficult to price acquisitions fairly or to satisfy token holder expectations, as evidenced in Fei-Rari and in Gnosis-xDAI. Regulation is a landmine. The absence of standards for legally binding DAO transactions prevents potentially valuable agreements from being implemented.

Instead, DAOs are turning to token migrations and swap contracts as workarounds to regulatory uncertainty. Security concerns remain challenging for DAOs, as hacks can erase billions in value overnight. Just ask Fei’s token holders, who had to cover $80 million in the Rari exploit.

And sometimes the «mergers» aren’t mergers at all: Yearn Finance’s advertised mergers with Yearn, PIckle, Cream, SushiSwap, and Akropolis were really a series of loose partnerships that generated significant confusion over governance and responsibilities.

With all that said, we believe that M&A can be a DAO superpower. That is, DAOs can feasibly execute M&As more efficiently and recognize more synergies than any traditional organization. Imagine standardized swap and acquisition contracts, platforms for M&A discovery, or protocol conglomerates that create richer, more integrated on-chain ecosystems.

Despite challenges, DAO M&A is here to stay. If anything, the increasing complexity of Web3 ecosystems makes consolidation inevitable. But, for future deals to succeed, DAOs must rethink how they approach M&A. Better governance alignment is crucial, as DAOs need structured frameworks to align stakeholder incentives and avoid the infighting that doomed Fei-Rari.

More thoughtful valuations are necessary since a token swap is not the same as a cash buyout; valuation models must account for token liquidity, governance power, and future earnings potential. Security must be a top priority, with rigorous smart contract audits and stress tests to prevent both catastrophic exploits. And DAOs must engage with these complex dynamics instead of hand-waving them away — and invest in the infrastructure and partnerships to execute them.

If DAOs can learn from these early experiments, M&A could become a critical tool for building resilient and scalable decentralized organizations.

But we’re not there yet. Merging DAOs isn’t just about putting two treasuries together. It’s about integrating communities, governance structures, and technical systems in ways that enhance — not undermine — the value of these organizations.

The full State of DAO M&A (February 2025) report by DAOstar, Areta, and Emory University is available here.

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Arbitrum Ecosystem Unveils ‘Onchain Labs’ to Support Early-Stage Projects

Published

4 часа ago

17 марта, 2025

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The main organizations supporting the Arbitrum blockchain, Offchain Labs and the Arbitrum Foundation, unveiled a new program designed to kick-start early-stage projects in the ecosystem.

The new program, «Onchain Labs,» is designed to provide go-to-market support to «experimental and volatile» projects, according to a blog post from Offchain Labs, Arbitrum’s main developer.

“Through Onchain Labs, we’re dedicating resources to support developers looking to rapidly expand the application layer by ideating with them from the ground floor to bring the best user experiences to Arbitrum,” the blog post said. “As we do with many Arbitrum teams, we’ll provide product and [go-to-market] support to these early-stage projects, collaborating closely to help their applications thrive on Arbitrum.”

Arbitrum Foundation is a non-profit that stewards Arbitrum ecosystem governance. Offchain Labs, which created the blockchain in 2021, focuses on developer tooling and core network infrastructure.

Offchain Labs is pitching its new initiative as a way to spur greater activity and interest in the wider Arbitrum ecosystem. According to the blog post from the company, the first Onchain Labs projects will soon emerge from stealth. Offchain Labs said the only projects supported by its new program will be those that explicitly «commit to fair and equitable launches» — presumably meaning they avoid token launches and other mechanics that preference insiders.

Offchain Labs stated in its blog post that the selection criteria are meant to avoid «extractive ecosystems» and «zero-sum games.» Tandem, Offchain Labs’ venture capital arm, «may or may not purchase associated tokens in public markets,» the company added.

Arbitrum is a layer-2 optimistic rollup network on Ethereum. Like other rollups, the chain is designed to process transactions faster and more cheaply than the main Ethereum blockchain. Several new blockchains are built on Arbitrum’s technical framework, forming a network of interconnected blockchains called Arbitrum ‘Orbit.’

Arbitrum is currently the largest layer-2 network on Ethereum, with roughly $12.2 billion on its primary ‘Arbitrum One’ chain, according to L2beat.

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Gemini Hires New CFO as It Prepares for Potential IPO

Published

4 часа ago

17 марта, 2025

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Crypto exchange Gemini has appointed a new chief financial officer as it positions itself for a potential initial public offering.

The company’s latest hire, Dan Chen, who previously served as vice president of capital markets at Affirm, announced the move in a social media post.

«Crypto is the most dynamic sector in finance and Gemini is at the forefront of this revolution — making it simple and secure to engage on the digital asset frontier,» Chen wrote in the post.

Chen will work alongside Gemini co-founders Cameron and Tyler Winklevoss to help scale the business. The timing of the hire aligns with Gemini’s reported ambitions for an IPO, which would provide greater access to capital while subjecting the company to the transparency requirements of public markets.

If Gemini moves forward with the public listing process, it will be part of a small but growing number of crypto-native companies considering an IPO in the U.S. stock exchanges, including Kraken, Circle, Bullish (parent company of CoinDesk) and Blockchain.com

Gemini has not formally confirmed its IPO plans, but the appointment of a CFO with extensive experience in financial strategy suggests that preparations may be underway.

Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.

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Bakkt Shares Drop 35% After Loss of Two Major Customers

Published

5 часов ago

17 марта, 2025

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Bakkt Holdings (BKKT), a crypto exchange and custody firm, saw its shares plunge on Monday after disclosing that neither Bank of America (BAC) nor crypto trading app Webull Pay would renew their commercial agreements with the company.

At the time of writing, BKKT shares have dropped 35% in after hours trading to $12.83. The stock made its all-time high in October 2021, when it was traded for $1,063 shortly after the firm became public through its merger with VPC Impact Acquisition Holdings.

Bank of America accounted for roughly 16% of Bakkt’s loyalty service revenue in 2023. Webull, meanwhile, represented 74% of Bakkt’s crypto service revenue in the same period. The agreement with Bank of America is scheduled to expire on April 22, while the contract with Webull will end on June 14.

Bakkt has requested an extension of time to file its 2024 annual report with the SEC.