Merit Circle to buy out Yield Guild Games’s seed investment

Decentralized autonomous organization (DAO) Merit Circle will buy out the investment it received from Yield Guild Games (YGG) following an earlier disagreement whether the latter’s backing should be refunded.

YGG’s founders / Photo credit: YGG

Merit Circle and YGG issued a joint statement agreeing to buy out YGG and Nifty Fund’s allocation into Merit Circle Ltd for a total of 5.4 million MC tokens at US$0.32 each. This would total the sum of US$1.7 million worth of USD Coin.

The proposed solution will also terminate the formal relationship between Merit Circle and YGG.

This agreement was mediated as a result of the pushback from the DAO’s community, which claimed that YGG “lacks value” as an investor and thus should be refunded its investment.

The disagreement started with Merit Circle’s request on April 28 this year for seed investors, which included YGG, to outline their contributions. Following that, a Merit Circle member made a proposal (called MIP-13) to cancel YGG’s Simple Agreement for Future Tokens (SAFT), refunding their initial investment and removing their Merit Circle seed tokens.

“We both recognized the arbitrary nature of the MIP-13 proposal and the danger a precedent like this could set for the Merit Circle DAO and the industry as a whole if agreements are not upheld and investors are not respected. The chosen tool was too crude and did not do justice to prior agreements,” the companies said in the joint statement.

Merit Circle and YGG came to an agreement that was presented in proposal MIP-14, a solution they believe satisfies the will of the Merit Circle community but is also acceptable to YGG.

The two firms will also sign a legal agreement, enforcing the buy-out offer legally and protecting both sides against future litigation.

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