Outside Source
Key Takeaways
- Nader Al-Naji, the entrepreneur behind BitClout, is launching a new project called (DAO,DAO).
- (DAO,DAO) says it wants to make creating and running DAOs easier by offering a middleman service.
- The project received harsh criticism on social media when it was announced on Mar. 9.
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Nader Al-Naji, the entrepreneur behind the tumultuous BitClout project, has announced a new platform called (DAO,DAO). The project aims to streamline the process of making and running a decentralized autonomous organization—while siphoning money from the DAOs raising money on the platform.
What Is (DAO,DAO)?
The BitClout grifter is back—with a DAO project called (DAO,DAO).
In the marketing material for (DAO,DAO), its creator Nader Al-Naji calls out two of the biggest crypto companies, Coinbase and OpenSea, slamming them with a tag of angry red text that reads “centralized.” In comparison, (DAO,DAO) is adorned with the friendly green word, “decentralized.”
This fatuous pictograph broadly sums up what Al-Naji is selling prospective investors with (DAO,DAO)—the nebulous promise of decentralization. (DAO,DAO) aims to make creating a DAO as easy as setting up a Facebook account. In the project’s 14-page long “one pager,” Al-Naji explains the use cases for his new project, most of which involve collectively raising money for various causes, goals, and investments.
The platform will use decentralized token governance, allowing DAODAO token holders to have a say in how the platform is run. However, while (DAO,DAO) might call itself decentralized, the workings behind the project paint a different picture.
(DAO,DAO) appears to be a glorified middleman designed to siphon off money from DAOs and deliver it into the pockets of DAODAO token holders. While most DAODAO tokens will be sold to the public through a method suspiciously close to an initial coin offering, Al-Naji and his anonymous founding team will receive an automatic 10% of all tokens purchased by the public. If this percentage-based payout for the developer team wasn’t dubious enough, (DAO,DAO) also offers the chance to buy early access NFTs, which allow investors to keep 100% of their DAODAO token purchases.
DAODAO token holders can expect to receive 1% of all funds raised by DAOs using the (DAO,DAO) platform. This raises the question of how the Securities and Exchange Commission will view the DAODAO token. In its current state, it seems likely that the SEC will view the token as a security since it promises to accrue profits that come solely from the efforts of others.
Nader Al-Naji’s Track Record
Al-Naji has run into problems with the SEC in the past. His first project, a decentralized, price-stable cryptocurrency called Basis, ground to a halt when it became apparent it was trying to publicly sell tokens with the characteristics of securities.
The overarching question that comes to mind with (DAO,DAO) is why do we need it? Several DAOs have already successfully raised millions of dollars for various causes. Recent examples include AssangeDAO, which raised over $41 million at the start of February, and UkraineDAO, which continues to raise funds to support those affected by the Russian invasion of Ukraine.
One way (DAO,DAO) states it will improve the current DAO infrastructure is by allowing DAOs to raise funds over multiple networks rather than just Ethereum. Admittedly, this is a potential selling point because gas fees on the Ethereum network eat into DAO contributions and make giving refunds a costly endeavor.
However, (DAO,DAO) ’s answer is to run everything on DeSo, the rebranded husk of Al-Naji’s previous project, BitClout. Instead of building useful DAO interoperability between different networks, Al-Naji looks to be trying to bootstrap DeSo users through his new project.
Other minor criticisms of (DAO,DAO) include the project’s name. The formatting borrows from the (3,3) meme associated with token rebase projects such as OlympusDAO, which are often decried as Ponzi schemes due to their highly inflationary tokenomics. Additionally, the name “DAO DAO” already belongs to a project involved in building DAO tooling on Juno Network.
When Al-Naji announced (DAO,DAO) to his Twitter followers on Mar. 9, many key members of the crypto community were quick to question the project and its creator’s questionable track record. The Twitter account Autism Capital was one of several to weigh in on (DAO,DAO), advising followers to “Stay away from Nader projects and this and don’t lose your money and get (REKT,REKT).” Others such as Edwin den Boer highlighted the trail of failed projects that led to (DAO,DAO) and warned followers not to trust Al-Naji.
BitClout’s Failings
Aside from Al-Naji’s failed stablecoin venture between 2017 and 2019, he’s arguably best known for BitClout. The divisive crypto social media platform emerged when interest in digital assets was hitting new highs in 2021, offering users a way to buy and sell personalized “creator coins” based on their subjects’ reputations. It effectively tokenized social clout, with the likes of Elon Musk and Katy Perry deemed as the most valuable personalities on the platform.
BitClout enticed several high-profile Silicon Valley investors, including the crypto-curious mammoths Andreessen Horowitz and Sequoia Capital. However, once the initial hype faded, it quickly became clear that the project couldn’t meet users’ expectations. It rebranded to DeSo in September after failing to gain any meaningful traction.
The unregulated nature of the crypto space allows innovation and development to occur at breakneck speed, but the environment also comes with some major risks. Grifters have a much easier time separating high-profile investors and the public from their cash with big promises and flavor of the week buzzwords. While it remains to be seen whether (DAO,DAO) will prove successful, its creator’s previous track record of failed projects such as Basis and BitClout should make potential backers think long and hard before investing.
Disclosure: At the time of writing this feature, the author owned ETH and several other cryptocurrencies.
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This article first appeared at Crypto Briefing
