Temple DAO: Pocketing $16M and Slow Rugs
Temple DAO is an Olympus DAO Fork that was launched in 2021. It's process to get involved with the DAO involved a bunch of tedious games and puzzles that involved a lot of praying in discords, solving puzzles in games and more.
I didn't get involved as it seemed too cultish and barriers to entry for the DAO seemed too high (took me many "!pray" in the discord to find out I was getting trolled).
It caught everyone's attention this week as it got hacked/exploited for $2m. This lead to increased scrutiny in the workings of the DAO and turns out Temple DAO spent $16 million in salaries in 2022.
Here's a document by holders of Temple DAO that was shared by DCFGod (one of the most well known activist investors of sorts in DeFi)
The Temple Analysis google sheets shows a bunch of details about the salaries paid. It shows a bunch of addresses receiving 6/7 fig annualised salaries.
Here are a bunch of tweets about it
Anyways I don't really care about Temple DAO or it's mission.
TempleDAO is just one such example of a DAO 'soft rugging'. Rugging is a term that originates from Rug Pull which basically refers to a protocol being hacked. While rug pulls are usually illegal and undisputably morally wrong, soft rug refers to rugs that are legal in nature that can be easily mistaken for a rug.
Instead of stealing the treasury funds and abadoning the project, scamming the investors in the DAO, Temple DAO founders decided to pay themselves and DAO contributors above 'normal' payslips.
Another recent example would be the Ragnarok Meta NFT Collection soft rugging by paying themselves ridiculous salaries (p.s. looks like they rebranded to 77-Bit)
The founder also leverage traded treasury funds and lost $2 million haha. This would be a lot funnier if I didn't have a stake in his project.
As far as I am aware, there are no legal repercussions for soft rugging in crypto (after all it is done legally).
The only solution for this other than regulations by governments is educating crypto market participants about how to avoid soft rugs but that's also tricky as soft rugs tend to resemble failed projects due to an incompetent team or not finding product market fit.
tldr: soft ruggers gonna soft rug until the government shows up and pulls up with laws