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Fortress DAO is doomed. The question is how it dies.
Fortress is an also-ran fork of Olympus DAO running on the Avalanche blockchain with a mere $14M in its treasury (a shadow of the more than $500M+ still backing Olympus’s OHM), but feelings are running very high right now over what should happen with that money.
The problem is that the $14M isn’t really in its treasury anyway. It’s in a separate project, one that was funded by the Fortress DAO treasury, but is now completely in control of its chief technical officer, Avraham Eisenberg, who has shown no interest in giving it back.
Community members that spoke to The Defiant predicted the matter could very well find its way to court. But for now, code is very much law and that particular law is not on the Fortress DAO community’s side.
But the story also raises a question much larger than this tiny DAO: Does its inevitable collapse foreshadow future meltdowns at other DAOs whose governance does not, in fact, run on-chain?
But the implications go further. Anyone paying attention knows that many of crypto’s DAOs aren’t really that decentralized. Sure, they all have a governance token, but the power to spend money and change code still, in all too many cases, actually rests in a small group of insiders who have control of a mult-sig wallet that makes decisions.
It’s like a small republic that spent too much money on their military. At a certain point, the legislature only remains in charge as long as the generals let them say they are. On the blockchain, those who can sign transactions do.
But the real power in Fortress DAO isn’t even its own smart contracts, it’s the assets. The real assets, the assets that could actually be traded outside of the Fortress DAO ecosystem, all the $14M worth of stuff that left its smart contracts and went into FUSD.
So, Eisenberg has everyone over a barrel, because all the real FortressDAO assets are inside FUSD and FORT holders have no direct power to make him give those funds back.
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