Rook DAO, a decentralized autonomous organization (DAO) in the field of decentralized finance (DeFi), recently made headlines when it performed a "rage quit" that led to a significant price increase for its native token, ROOK. This move caused the value of the token to surge by an incredible 475%, making it one of the most powerful DeFi tokens this year. However, the concept of a "rage quit" is not new in the world of DAOs and refers to a situation where a member or a group of members suddenly and dramatically decides to leave the organization and withdraw their funds.
In the case of Rook DAO, the split was triggered by a dispute over the distribution of rewards. Some members believed that the rewards were unfairly distributed to certain individuals, while others believed that the system was working as intended. Following a heated debate, a group of members decided to quit in anger, withdraw their funds, and split the DAO into two separate units.
According to DeFi researcher "DeFi Ignas", IncubatorDAO received 60% of the treasury worth $25 million as part of the split. Instead of holding onto the assets, IncubatorDAO decided to sell them for USDC, a stablecoin pegged to the US dollar. This move aimed to provide liquidity to both Rook and IncubatorDAO token holders and enable greater flexibility in future investment opportunities. However, there is a catch. The USDC obtained from the sale of treasury assets can only be redeemed by Rook token holders until July 12th. After the deadline, the USDC is locked and inaccessible, making it practically worthless.
The aftermath of the split was fascinating. On the one hand, the price of ROOK soared, making it one of the most powerful DeFi tokens of the year. On the other hand, a new DAO was created, known as the Fair Launch Initiative, which aims to promote fair and equitable distribution of rewards in the DeFi space.
As DeFi Ignas highlights, the recent split of Rook DAO and the subsequent distribution of USDC has raised a speculative question in the DeFi community; how many ROOK token holders will redeem their tokens for USDC before the July 12th deadline? While the fair value of ROOK is estimated to be $40, the current trading price of $59 suggests that speculators are putting a premium of over 50% on the price and likely betting that some holders will forget to redeem their tokens.
However, there are still $17 million worth of USDC that have not been claimed from the contract. This has led to further speculation about the possible actions of key players in the DeFi space like Polychain Capital. Polychain already invested a "seven-figure amount" in ROOK tokens in 2020 and recently transferred 100,000 tokens worth $5.8 million to a new address, possibly to sell, according to DeFi Ignas.
Furthermore, Ignas believes that the decision to sell or redeem the tokens is a strategic waiting game for Polychain, as redemption of the tokens by July 12th could lead to a basic payout of $4 million USDC and an additional $4.7 million USDC for their pROOK with no further redemptions. However, if they decide to sell on the open market, they could potentially lower the price of ROOK.
In conclusion, the recent split and subsequent distribution of USDC by Rook DAO has caused a stir in the DeFi community. The fate of the remaining USDC and the possible actions of key players like Polychain will continue to be closely watched in the coming weeks leading up to the July 12th deadline.
