Two Gaming DAOs Skirmish Over Funding Deal Turned Sour

May 27, 2022 World Blockchain

Key Takeaways
Gaming-focused DAOs Yield Guild Games and Merit Circle have been embattled in an almost week-long dispute over an early investment deal.
A member of the Merit Circle DAO has proposed to null the seed funding deal with Yield Guild Games, citing a lack of “value-add.”
In a statement published today, YGG said that the legally binding agreement contained no “value-add” conditions.

The two most prominent gaming-focused decentralized autonomous organizations, Yield Guild Games and Merit Circle, have been embroiled in a near week-long dispute over a seed funding deal allegedly gone sour. The conflict has piqued the interest of many industry pundits, raising questions about the intersection of law and decentralized governance.

Merit Circle DAO Proposes Ousting YGG
A member of the Merit Circle DAO has proposed revoking the group’s early-investment deal with Yield Guild Games.

The two biggest play-to-earn gaming guilds have been struggling to find a compromise for nearly a week after a member of the Merit Circle DAO posting under the pseudonym HoneyBarrel submitted a governance proposal to null its early funding deal with Yield Guild Games. Citing the lack of “value add” that YGG had allegedly failed to provide to Merit Circle as the primary reason, the proposal suggested unilaterally canceling YGG’s SAFT (Simple Agreement for Future Tokens) and returning the gaming guild’s initial investment back. It said:

“The Merit Circle DAO needs seed investors who are adding value. This is something that the team, community, and investors agree upon. I have demonstrated that YGG does not fit into this criteria. They are competitors who are only interested in extracting value, and profit, from the DAO, and their actions go against the ethical principles that Merit Circle upholds.”