Aragon.eth CEO Criticizes DAO Governance, Yuga Labs Proposes ApeCo Transition

Anthony Leutenegger, CEO of Aragon.eth, expressed his frustration on X regarding the current state of decentralized autonomous organization (DAO) governance. He questioned how forums and off-chain signaling became synonymous with DAO governance, and suggested that the mental model of decentralized governance needs to shift. Leutenegger proposed alternatives such as smaller subDAOs and protocol upgrade veto rights to address these issues. His remarks came in response to a proposal by Yuga Labs CEO Greg Solano, who suggested replacing the ApeCoin DAO with a new structure called ApeCo.

Solano, in a post on X, criticized the ApeCoin DAO for being inefficient and slow, arguing that the slow governance processes hindered progress and real projects. The proposal, titled “Sunsetting the DAO and Launching ApeCo,” aims to dissolve the existing DAO structure and replace it with a new management model under ApeCo. Solano claimed that this shift would improve decision speed and labeled previous governance efforts as low-impact initiatives and theater. Critics, however, noted that some valuable projects still benefited from the DAO model.

The proposal outlined transition steps, including allocating 11.25 million APE tokens to a staking contract and an additional 10 million APE to cover legal and transition costs. All remaining assets, including tokens, digital infrastructure, and intellectual property rights, would shift from the DAO to ApeCo. This plan moves from a tokenholder-driven model to a centralized entity backed by Yuga Labs. Supporters argue that this approach increases flexibility for future ecosystem growth.

Advocates for the ApeCo proposal pointed to inefficiency and misalignment within ApeCoin DAO governance, arguing that governance became a venue for low-value proposals and political games. Critics said meaningful projects were overshadowed by bureaucratic processes and delays. The proposal suggested that centralized oversight could avoid governance theater and resource inefficiency, potentially leading to faster decision-making and streamlined operations. However, the proposal did not guarantee the elimination of all decentralized autonomous organization principles, and some believed that decentralization benefits could still persist under the new model.

Supporters of the ApeCo system argued that this change enables faster product development and efficient capital allocation, benefiting ecosystem growth and innovation. Focus areas would include ApeChain, Bored Ape Yacht Club, and Otherside metaverse. The proposal planned milestone-based grants to ensure accountability and results, with clear milestones reducing the risk of unfulfilled initiatives and delays. Proponents expected renewed interest from developers, builders, and community members, and believed that centralized oversight could still incorporate community feedback effectively. Backers argued that the streamlined process contrasts favorably with governance delays.

The proposed ApeCo system remains at the “temperature check” stage on governance platforms, with no changes occurring until a formal on-chain vote takes place. If approved, it would end the operations of the ApeCoin DAO, with transition planning focusing on ensuring minimal disruption to ongoing projects. Community members awaited details on how ApeCo governance would operate, and observers noted that this shift would influence other NFT ecosystem models. Debate continues over balancing decentralization with efficient management in crypto projects.

The outcome of the proposal holds ramifications for tokenholder engagement, with observers predicting similar proposals might emerge in other crypto communities. The debate highlights tensions between decentralization and operational efficiency in evolving blockchain ecosystems. Lessons from this case could inform future DAO designs, with project leaders needing to balance governance speed with community input carefully. Stakeholders will watch the vote results closely for broader industry trends, as the crypto sector continues exploring new governance models amid growth pressures.