The proposal to sell 20 million LDO tokens didn’t get approval

The Head of business development of DeFi staking protocol Lido (LDO) created a governance proposal to sell 2% of the LDO token supply from the DAO treasury for DAI to private investors. The deal was supposed to diversify the treasury with stablecoins in order to shield from crypto price volatility and provide enough funds to cover approximately 2 years of operating costs for the project.

According to the proposal, one half of tokens, or 10 million LDO, would go to venture firm Dragonfly Capital, and another half would be allocated to “other strategic participants”.

During the discussion on the official forum of the DAO, many have raised their concerns over the lack of any lockup period in the original proposal, which would have allowed the venture firm to dump tokens on the market right after the purchase.

Once the proposal was put before LDO holders for a vote, a whale holding 15 million LDO voted to proceed with the sale without any lockup period, which sparked uproar in the community. The tokens to the pseudonymous whale were supplied by trading firm Alameda Research, according the CEO of crypto analytics firm Nansen.

Following the backlash, the pseudonymous whale changed his vote to proceeding with the sale, but with a one year lockup period. Additionally, the majority of LDO holders voted in favor of putting the proposal on pause.

The Lido protocol allows users to earn staking rewards without locking their staked assets for a long time and without maintaining costly staking infrastructure.

On that note, Snapshot — an off-chain voting platform for decentralized autonomous organizations (DAOs) — is set to release a new feature that will encrypt votes during the voting process. Hiding the distribution of votes until the governance poll is finalized suppose to reduce the influence of already-cast votes on behavior of the remaining voters.

Minecraft cracks down on NFTs

Mojang Studios has banned the use of NFTs and other blockchain-related items in its popular game Minecraft. Developers explained that NFTs “can create models of scarcity and exclusion”, taking the focus away from creativity to play-to-earn (P2E) strategy.

Microsoft acquired Minecraft and Mojang Studios for $2.5 billion in 2014.

Commenting on the issue, the CEO of Epic Games said that his firm won’t ban NFTs because game stores shouldn’t force their views onto others.

Earlier in 2021, PC gaming online store Steam banned games that utilize blockchain tech including cryptocurrencies and NFTs. Following the announcement, the CEO of Epic said that Epic Games Store welcomes games that make use of blockchain tech.

Epic’s most popular game Fortnite already has in-game currency (V-Bucks) and has been banned from the App Store and Google Play in 2020 for trying to bypass platforms’ 30% revenue cut for all in-app purchases.

In other news

• Electric car manufacturer Tesla (NASDAQ:TSLA) disclosed that the company sold 75% of its Bitcoin holdings - worth about $936 million - during the second quarter of 2022 to bolster cash reserves. Tesla CEO Elon Musk explained the move with liquidity issues triggered by the series of lockdowns in China that shut down company’s Shanghai factory.

• Centralized crypto lending platform Celsius has officially declared bankruptcy after repaying its over-collateralized debt to various DeFi protocols and freeing hundreds of millions of dollars in crypto. Earlier in June, the troubled company has experienced the liquidity crisis and frozen withdrawals from its platform following the LUNA/UST collapse.

• WZRD NFTs that were listed on marketplaces for sale have been burned without consent from their holders by other WZRD holders using ‘altarOfSacrifice’ feature. Following the event, some collectors accused the project team of price manipulation, while others praised the developers for the most innovative storytelling, pointing out that victims received ‘Half-Skull of WZRD’ NFTs to participate in the future chapters of the story.

• Latvian NFT artist Ilja Borisovs (Shvembldr) is facing up to 12 years in prison on accusations of money laundering. According to artist’s recent report, his bank account has been frozen and property seized since February. Borisovs is a former employee of Meduza, Latvia-based news outlet blocked in Russia, who started his career as a generative artist in 2021 and earned $8.7 million selling NFTs since then.