Merit Circle DAO votes to end the partnership between the two giants of the play-to-earn space.
Joint Statement Announces End Of Partnership
After working together for seven months, the Merit Circle DAO has voted to terminate the relationship with Yield Guild Games (YGG). The vote was followed by buying out YGG’s 175,000 USDC ($175,000) investment in the P2E DAO for 1.75 million USDC. Both teams released a joint statement on Medium, which reads,
“Collaboratively, Merit Circle Ltd and Yield Guild Games came to an agreement. The proposed solution terminates the formal relationship between the Merit Circle DAO and Yield Guild Games. This space would not be where it is today without Yield Guild Games, and not without the Merit Circle DAO.”
What is A Gaming Guild?
A crypto gaming guild like YGG is essentially a group of P2E gamers who invest in games with a mission of earning profits and building strong communities in the crypto-gaming space. Many such gaming guilds catapulted to success during the heyday of the metaverse and crypto-gaming towards the end of 2021. However, things have changed since then, and 2022 has brought in a bear market that has also dampened the metaverse. As a result, companies and DAOs in the space are focusing on cutting costs just to stay afloat. The decision to part ways between these two P2E forces was set in motion when the Merit Circle community decided to evaluate the contribution of their seed investors.
“Lack Of Value” Or Cutting Costs?
It all started with a MIP-13 proposal by a member called “HoneyBarrel” that claimed YGG had failed to provide enough value, asked that the SAFT be canceled, and the guild be refunded its initial investment. The proposal got surprising amounts of support from the DAO community, forcing YGG to release their own statement that pointed out that as seed investors, they were not obligated to provide any value-add beyond the investment. In response, The core team at Merit cited the many different ways that YGG had contributed to the success and growth of Merit Circle; however, it also acquiesced that the ultimate power rested with the DAO community. Both parties realized that the proposal and the prior agreement with investors were at odds and could result in a long-drawn-out legal battle. Therefore, as a counter-proposal to MIP-13, a joint agreement to terminate the partnership was presented in MIP-14.
“Stain On Web3”
Several industry experts have expressed their disapproval over the whole incident. Founder of crypto educational platform, 101.xyz, Tim Connors has pointed out that the buyout gave YGG just $1.75 million, whereas their investment could have been worth $5.2 million.
He tweeted,
“Decentralization is not about ruthless self-interest. It’s about collaboration. And if we want this industry to continue to thrive, then we’ll need to collaborate with the off-chain world too. That includes honoring legal agreements with investors.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
