A DeFi protocol has just proposed going private because its administrators believe the current DAO structure is a barrier to institutional deal-making.
Across Protocol’s ACX token soared 80% to $0.06 on Thursday after the team behind the cross-chain bridging platform published a ‘temp-check’ proposal to dissolve the token structure and convert it into a traditional US C corporation.
“As Across deepens our work with institutional and corporate partners, the token and DAO structure has had a material impact on our ability to form partnerships and integrations,” the proposal reads. “Moving to a traditional legal entity would significantly improve our ability to enter into enforceable contracts, structure revenue agreements and deliver greater value to all stakeholders.”
“At current ACX valuations, we believe Across Protocol is significantly undervalued. The proposed structure gives us the opportunity to explore new ways to drive growth while acting in the best interests of the broader Across community.”
A temporary check on the DeFi board is essentially a non-binding poll that gauges community sentiment before a formal vote. It shows the team whether there is enough support to proceed as an official governance proposal, which will then be voted on by token holders.
This move would give token holders two choices: exchange their ACX for shares in the new company, or sell their tokens for $USDC at $0.04375, a 25% premium over the average trading price over the previous 30 days.
The token was trading at around $0.033 before the proposal went live. The immediate rise to $0.07 before settling around $0.06 reflects the market price on the buyout floor, although the current price is already well above the proposed buyout of $0.04375, indicating that traders are betting on a higher bid or that the stock option is worth more.
In comparison, BTC is currently trading flat, according to CoinDesk market data. The CoinDesk 20, which measures the performance of the largest digital assets, is also trading flat.
The mechanics are simple. A new entity called “AcrossCo” would manage all protocol IP and manage development. Token holders above 5 million ACX can be converted directly into shares.
Smaller holders could access shares through a no-fee SPV structure with a minimum of 250,000 ACX, approximately $10,000 at current prices. Everyone is treated equally with a 1:1 token-to-share ratio, regardless of size.
Those who don’t want equity get it $USDC buyout at 25% premium. The buyout window would open within three months of the approval of the proposal and remain open for six months, financed by the protocol’s liquidity.
A community call is scheduled for March 18, the formal discussion will run until March 25, and a snapshot will follow on March 26. If passed, the conversion will begin in early April.
Is the DAO vision dead?
DeFi proponents have argued for years that tokens and DAOs were superior to traditional corporate structures for building decentralized infrastructure.
Across is one of the first protocols to publicly argue the opposite, that the token structure is actively holding back growth and that a C-corp would deliver more value to the same stakeholders.
Risk Labs acknowledged that the token is “significantly undervalued” and described the proposal as an opportunity to “Double Across” through a structure that institutional partners actually understand.
The 24-hour trading volume of $149 million is roughly 3.5 times the token’s market cap, reflecting the intensity of speculative interest surrounding the proposal.
Whether that interest translates into support for the conversion or simply a trade on the buyout premium is what the next two weeks of board discussion will determine.