Merit Circle / YGG Dispute: Time to Wait
Simone Conti and Ozan Polat from Dialectic
The goal of this proposal is to take a cool-off period of three (3) weeks before moving forward with any decision. It will help to deeply evaluate all the economic and legal aspects of the ongoing dispute between Merit Circle and Yield Guild Games.
As Dialectic we’re seed investors in both the DAOs - Merit Circle and Yield Guild Games - and we have an extraordinary relationship with the founders of the two companies.
After talking to all of them we believe that it is possible to reach an agreement between the parties avoiding a legal cause that stuck everyone in years of waiting, frustration, waste of energy, and loss of focus.
The 1 week time defined by the MIP-13 is undoubtedly too short to evaluate all the possible second, and third-order consequences that will impact the DAO / the Community , economically, strategically, and legally on all the people involved beyond the Founders as well as all the members of the respective communities who have been active, participated, voted in the discussions regarding the cancellation of the SAFT and finally the impact on the entire ecosystem.
There is no need to rush right now. Three weeks is the minimum time needed to be able to consciously assess all the possible consequences and make a decision on this matter.
Motivation and Rationale
The motivation behind this proposal is clear and straightforward: Merit Circle and YGG are the two largest DAOs in the space and a decision as significant as this cannot be made in a thorough way on such a short notice.
The first governance proposal regarding this topic has been made on May 20th, 2022.
After 6 days the proposal has been moved into Snapshot (MIP-13) with 2 days of voting and on May 28th the “Yes with Clause” passed meaning that Merit Circle should refund the YGG / Gabbi Dizon SAFT but the parties have a 1 week time period for finding a solution that would be more beneficial for both the DAOs.
The truth is that a decision like this has enormous impacts on the whole ecosystem and not just on the parties involved because the cancellation or refund of a SAFT is something very delicate, never happened before with 2nd & 3rd order implications.
It is extremely difficult to assess all the possible reputational, financial, economic, and legal consequences.
We have seen many companies out there destroying more value than capturing by getting into legal fights that could have been avoided. As seed investors of both DAOs, our advice is not to rush things, let’s take the right time to think clearly, with prudence and conscience.
Decisions like these taken without carefully evaluating all the possible effects will then be regretted and as experienced investors, we are here to strongly advise against being in a hurry. Haste makes waste.
No budget needed
- YES - Take a 3-week cool-off period before making any decisions regarding the cancellation or refund of the YGG / Gabbi SAFT
- NO - Take the decision now without the need for the cool-off period
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