The culprit behind AI's downturn? The "daos.fun bubble" behind AICC's plummet

Author: Ismay, BlockBteas

As a project that claims to be a "VC-free investment DAO platform," daos.fun staged a revival of "VC coins" over the weekend.

On January 11, the Aiccelerate DAO's native token AICC, supported by advisors including Shaw, co-founder of ai16z, #001 Ethermage, a contributor to Virtuals Protocol, and Jason, co-founder of Story, officially launched for trading. After its launch, AICC's market cap briefly exceeded $300 million. However, this short-lived highlight was quickly shattered by frantic sell-offs, with large holders dumping their assets, leading to a significant drop in market cap and strong dissatisfaction in the market.

Immediate Sell-Off Sparks Community Outrage

The hype for Aiccelerate DAO began a week prior, with the official announcement that users interested in becoming partners and participating in the presale could express their intentions and how they could help the project by retweeting, liking, and commenting on tweets. Aiccelerate DAO would select suitable partners for the presale based on user participation and expected contributions.

Using the daos.fun platform, Aiccelerate DAO allocated tokens to 250 KOLs, each receiving an allocation of 0.5 SOL, which instantly turned into $250,000 to $400,000 after the launch. Additionally, the advisory group of the project could donate up to 5 SOL.

However, these whitelisted users not only failed to fulfill their commitment to support the project's development but chose to sell off their tokens immediately after the launch for profit. This not only caused AICC's market cap to plummet but also had a draining effect on other AI concept tokens on-chain.

Among the KOLs in the "Crypto+AI" track, the most criticized were the crypto podcast Bankless and its affiliated VC Bankless Ventures for their sell-off behavior after AICC's launch.

The Rollup founder Andy tweeted that Bankless Ventures was selling tokens through a public wallet associated with their X account. "They are promoting this project on YouTube with their co-founder while starting to sell on the launch day."

It is reported that two hosts of Bankless each invested 5 SOL, while Ben Lakoff, who manages Bankless Ventures, invested 2 SOL under the Ventures name and personally invested 5 SOL.

Ejaaz, the initiator of Aiccelerate DAO, previously served as a product manager at Coinbase and began frequently appearing on the Bankless podcast to discuss AI+Crypto last November.

After Andy's tweet gained traction, Bankless co-founder David responded that they had repurchased the AICC shares sold by Bankless Ventures, calling it "an impulsive mistake."

However, Bankless's brand image suffered a significant blow, with some in the community tagging Bankless's sponsors, calling them accomplices of fraud.

In the latest Bankless Discord channel, co-founder Ryan responded that he and David were completely unaware of the token sale, which was conducted by Ben Lakoff, who did not understand the background of Aiccelerate DAO, for profit-taking purposes.

Will the Market Still Support daos.fun?

In this token dumping debacle, the whitelist mechanism of daos.fun has been a focal point of market attention. It is not the case that ordinary people can randomly retweet and support the project in the comments to gain whitelist access; typically, only KOLs with a large follower count and community foundation receive whitelists to endorse the project.

daos.fun is another star product for asset launches following pump.fun, but daos.fun is a fund launch platform, where the "funds" raised based on daos.fun will operate in the form of a DAO and issue corresponding DAO tokens.

A small number of creators with invitation codes can set fundraising targets, fund expiration dates, and management fees. Additionally, daos.fun's fundraising process introduces a whitelist rule, where the team selectively grants fundraising participation qualifications based on community interaction content, and they all need to link their social accounts to achieve a certain level of social reputation and moral constraint.

However, AICC, with its large and luxurious KOL lineup and its high opening and subsequent dumping chart, contradicts daos.fun's moral lock-up mechanism. On one hand, the project initiators of the investment DAO do not have clear standards for obtaining whitelists; on the other hand, users who obtained tokens at low prices during the fundraising phase cannot remain unaffected when the project rapidly rises.

Crypto KOL Skely believes that ideal whitelist participants should be those who "sell at high points and buy at low points, providing liquidity to stabilize prices while being willing to take risks, injecting their SOL funds and tokens into liquidity pools." However, this is clearly not the behavior that someone with a profit-seeking mindset would choose.

Skely suggests that the current whitelist mechanism of daos.fun could be improved through several points, such as: auctioning off 10% (or more) of the whitelist slots to the public, with the proceeds used for the DAO or liquidity pool (LP), as these individuals would likely cash out quickly. Allowing staking and providing liquidity, as well as permitting whitelist users to sell within certain limits, but with transparent rules so that buyers have clear expectations while avoiding allowing full sell-offs.

daos.fun founder baoskee responded that these suggestions have the potential for implementation.

At the same time, the community also criticized AICC for launching with an excessively high valuation even before having a product, which mirrors the script that once condemned VC coins, where pricing power is in the hands of the project party, who then sells to retail investors through market packaging. Whether it is the core players donating 5 SOL or KOLs obtaining 0.5 SOL shares through "sweet talk," under the current token issuance model, any process of "presale + whitelist + immediate trading" is difficult to purely eliminate speculators.

Peeling away the glamorous exterior, "Crypto+AI" still needs sufficient product support and real use cases to have a foothold in the current competitive market. Rather than being wrapped in the bubble of "AI concept stocks," it is better for users to genuinely feel the project's technological content and pragmatic long-term planning, which is the only way for investors to return to rationality and reject "VC coins."