Proposal looks to boot YGG as early Merit Circle backer due to ‘lack of value’

A proposal on the Merit Circle decentralized autonomous organization (DAO) is looking to refund the backing of Yield Guild Games (YGG) into it, citing the play-to-earn gaming guild’s “lack of value” as an investor.

YGG co-founder Gabby Dizon / Photo credit: YGG

Merit Circle, much like YGG, operates P2E-focused DAOs that invest in gaming titles and provide their users with opportunities to earn from blockchain-based games through scholarships. The Merit Circle DAO allows its community members to decide on different subject matters, which include naming executives and investing in projects.

The proposal to cut YGG came after the Merit Circle community decided to look into the value add of their seed investors since its launch. Since then, investors such as Maven11, Mechanism Capital, and DeFiance Capital – alongside YGG – have posted individual transparency and accountability posts outlining their value as investors and their vision for Merit Circle’s future.

The proposition argued that YGG has done little to contribute to Merit Circle’s growth given its position as a seed investor.

On YGG’s transparency and accountability post, the Philippine guild said that since its investment into Merit Circle, it helped the latter get featured on Yahoo Finance and CoinDesk, introduced it to other investors, and co-invested in the same projects Merit Circle has backed, among others.

HoneyBarrel, the DAO member that sent in the proposal, argued that getting Merit Circle’s name on Yahoo Finance and CoinDesk is cheap and takes little effort. They also found it difficult to nail down how much of a help YGG’s introductions to investors were for Merit Circle and disagreed that investing in the same projects adds value to the DAO, as other VCs outside of its network can do the same.

In an official statement regarding the issue, YGG said it has been working with Merit Circle’s founding team to help resolve the situation.

“After days of communication, Merit Circle opted to issue a request to the original poster to edit their proposal to provide an additional two weeks so that an alternative proposal can be put forward,” YGG wrote in the statement.

The gaming guild added that there were points in the proposal that are “mischaracterized” or “outright false” that put it in a bad light.

As of writing, HoneyBarrel’s proposal has garnered strong support from community members, which may see it put to a vote. If successful, it would remove YGG’s simple agreement for future tokens investment as well as its Merit Circle seed tokens, in addition to refunding the guild’s investment.

However, many of the comments under the proposal were written prior to the release of YGG’s statement.

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“The DAO relies on ongoing effort, and contributions, from all members, including the community, team, and seed investors,” said the proposal’s author. “By removing an investor who provides zero value, we can ‘trim the fat’ from the DAO, and ensure only those who want to see Merit Circle succeed remain.”