A Decentralized Autonomous Organization (DAO) called ApeDAO is in the process of being dissolved altogether. However, DAO is the third largest holder of the famous Bored Ape Yatch Club (BAYC) collection of NFTs, and intends to part with all of its tokens.
In total, ApeDAO, created by pseudonymous NFT collector Kylo Ren, owns 81 Bored Apes. To return users’ money, DAO intends to hold an auction and sell them. NFTs from at least four other collections will also be traded:
- Mutant Apes;
- Cool Cats.
DAO Project Fails – Reasons for liquidation
The information about the alleged NFT auction was released by a user who goes by the pseudonym Montana Wong. According to him, there was a rift between the members of the DAO, with part of them wanting to keep the project. On the other hand, others demanded the liquidation of the DAO.
The discontent is reportedly linked to the fact that the DAO’s governance token, called APED, failed to keep up with the value of treasury holdings. While DAO’s assets grow in quantity, the token’s value has not followed suit.
According to data from portfolio aggregator Zapper, ApeDAO’s treasury is worth around 13,000 ETH. However, the estimate only takes into account the floor value of the collections, implying that the figure must be even higher.
Based on this conservative assessment, the “fair price” of the token should be close to $16. However, APED is only worth $8, a 50% discount. But last year the token reached around $10.
As a result, the APED not only stagnated far below its intrinsic value, but also entered a downtrend. Disgusted with the situation, part of the DAO members claim that the liquidation of the project would serve to unlock value for its members.
“Given the current gap between the price of the APED and the net asset value of the DAO, liquidating the DAO would generate substantial returns for the token holders,” the proposal stated.
Under the proposal, the liquidation of DAO’s NFTs could yield up to 8 ETH for every 1,000 APED.
Voting in progress
At the time of writing, the proposal to liquidate DAO’s assets is in the process of community approval. As per the most recent data, 86.5% of the members are in favor of liquidating the DAO. Voting will take place until February 3.
Vote came as a surprise to Kylo Ren, who formed the DAO with NFTs bought out of his own pocket. But he stated that the custodians of the ApeDAO Treasury wallets will act on the outcome of the votes.
Paradoxically, the vote turned out to be exactly what DAO members had hoped for. The price of APED has appreciated 10% in the last 24 hours, reaching US$ 12.38 over the weekend.
If sales have to be made, it is possible that the Bored Apes will be traded at a discount, opening up buying opportunities.