A potential legal battle has been averted between the company supporting decentralized autonomous organization Merit Circle (DAO), Merit Circle Ltd and Yield Guild Games (YGG) after the organizations reached an agreement after the DAO initially voted to remove YGG.
Merit Circle Ltd is the company that created the Merit Circle DAO to help gamers interested in games that need to earn money by providing items from their treasure trove to use in the gameplay, as well as providing educational content.
The DAO initially accepted a proposal that would cancel YGG’s Simple Future Token Agreement (SAFT) and only refund it with an initial $175,000 (USDC) coin deposit.
Despite some bitterness, YGG still walked away with ten times their original investment.
An improvement proposal called MIP-13 was accepted on May 28. claiming YGG provided DAO with “insufficient value” and the guild was effectively Merit Circle’s “chief competitor” rather than a partner. The proposal would “cut fat” with the DAO to “ensure that only those who want Merit Circle to succeed remain.”
But passage MIP-13 may not have followed a legal agreement between Merit Circle and YGG that would see YGG receive tokens in exchange for their financial contribution to Merit Circle.
ASB said in response to a suggestion that it is not clear what legal authority the DAO has to void a contract signed by Merit Circle Ltd on its behalf, and that there are no conditions for Merit Circle to void a contract “regardless of how they presented it”. to the community.”
Merit Circle has negotiated a counter offer with YGG to comply with a legal agreement. It was published and unanimously passed On June 9, the DAO bought out part of the YGG fund.
This netted the guild US$1,750,000, ten times its original investment.
June 14 Merit Circle and YGG declared they were amicable on the outcome, stating that the decision “still satisfies the will of the Merit Circle community, but is also acceptable to YGG.”
They added that since the original proposal was in conflict with a previous legal agreement that Merit Circle had with YGG, it would likely lead to legal action.
Both parties said they recognize “the danger that a precedent like this could create for the Merit Circle DAO and the industry as a whole if agreements are not respected and investors are not respected.”
The number of DAOs increases by 8 times, and the number of votes and proposals grows.
“While the legal issue could probably be discussed at length,” the organizations said, “both sides agreed it was best to settle.”
“This will save both parties a costly, time-consuming litigation with uncertain outcomes. Neither side had to agree, but both sides chose a constructive path to help Merit Circle move forward.”
Merit Circle and YGG stated that while the decision ends the formal relationship between them, they will each continue to “dedicate their all to the development of the blockchain gaming ecosystem” and that Merit Circle will continue to receive “continuous support” from YGG. .
Credit : cointelegraph.com