Magic Internet Money (MIM) and SPELL builders are proposing a traditional legal structure to supplant the DAO overseeing the stablecoin with a nearly $700 million market cap. A project leader called on Abracadabra DAO to support a “transition of power” to a centralized entity complete with lawyers, jurisdictions, and trustees. “The purpose here is not to disrupt the decentralized nature of Abracadabra; in fact, it’s to protect it,” the AbracadabraTeam account wrote.
Abracadabra DAO is the latest crypto project swapping the lofty idealism of decentralized governance for some degree of centralization. The publicly shared reasons for the transition seem to tilt toward mundane business concerns, such as managing the DAO’s intellectual property and server expenses. SPELL token holders will vote the project through three phases of transition, starting with picking a jurisdiction for the new entity. Four countries are on the table: Switzerland, Singapore, Malta, and Bermuda.
Abracadabra DAO’s move to a centralized legal structure is part of a larger trend of decentralized finance (DeFi) projects transitioning to a more traditional corporate structure. This shift is driven by a combination of heightened regulatory scrutiny and more mundane business concerns.