Bankless controversy forces founders to burn tokens and separate from DAO

Amid the ongoing controversy around cryptocurrency media Bankless and the associated decentralized autonomous organization (DAO), BanklessDAO, the founders of Bankless have suggested separating the brand from the DAO.

Bankless co-founders David Hoffman and Ryan Sean Adams plan to submit a governance proposal to BanklessDAO to separate the two entities. The co-founders took to X (formerly Twitter) on Nov. 26 to announce that they also plan to burn all of their BanklessDAO (BANK) tokens on the back of this proposal.

Hello CT

To lead with the obvious, we could be better in accepting criticism of @BanklessHQ.

I hold Bankless very dear, and I’ve got an innate reflex to protect it when I see it being unfairly attacked.

This clouds my ability to hear what CT is trying to tell me,… pic.twitter.com/7L5ufQ1bAu

— DavidHoffman.eth (@TrustlessState) November 26, 2023

Hoffman and Adams’ decision to separate Bankless from BanklessDAO came in response to community criticism of BanklessDAO’s application for a grant from Arbitrum. Filed on Nov. 20, the application asked for 1.82 million Arbitrum (ARB) tokens from Arbitrum, a layer 2 scaling project for the Ethereum blockchain. The amount is worth around $1.8 million at the time of writing, according to data from CoinGecko.

“The concern is that BanklessDAO would not be able to make such ambitious proposals without leveraging the weight of the Bankless brand, which they did not produce, is not theirs, and ought not to benefit from,” Hoffman wrote.

The BanklessDAO community was quick to criticize the initiative, with many DAO members pointing out that the proposal requested almost two million ARB for writing content without providing detailed information about how the money would be spent. In response, BanklessDAO committed to revising the proposal to cut the one-year grant to three months and providing clear KPIs and milestones.

The argument between the proposal backers and opponents escalated rapidly on social media. Some commentators like pseudonymous Delegate Cash CEO Foobar accused Bankless founders of “legitimacy grifting” by pretending that BanklessDAO was completely unrelated to Bankless.

Some Bitcoin (BTC) enthusiasts like Pledditor also criticized Bankless founders for claiming “they aren’t grifters,” referring to Hoffman and Adams promoting projects like Nexo. “They later clarified that they were paid 31k…