Kujira proposes DAO to tackle liquidity, security issues

Kujira, a decentralized finance (DeFi) platform, recently faced significant challenges after the team deployed operational funds to improve liquidity and activity in the ecosystem.

This initiative was met with “exploits, socially engineered attacks and fallouts within the ecosystem,” resulting in rapid sell-offs and market destabilization.

According to an official X post, the Kujira team stated that they will post a proposal to establish a decentralized autonomous organization (DAO) called the Kujira Operational DAO.

Related: ‘Golden Boys’ behind Compound ‘governance attack’ agree to rescind proposal

Impact and community backlash

The team explained that they had “worked hard” to keep positions safe, but the rate of selling made this impossible.

“Although this was by design by a select few, we of course take full responsibility for the position getting to this point, and we are truly sorry that it’s affected price.”

The Kujira team also denied mentions from “certain influencers” on X, speculating that the ongoing situation is a “rug.”

The public statement by the DeFi platform team prompted a mixed response from the community, including Blockchain Ecologist describing the decision as “extremely irresponsible management.”

Related: Compound Finance proposals elicit ‘governance attack’ allegations

Kujira Treasury status and the proposed solution

The team countered claims that the entire treasury is at risk, explaining that 14 million native KUJI tokens remain “safe and sound in the treasury.”

The Kujira Operational DAO proposal would involve the DAO taking ownership of the Kujira Treasury and core protocols, “with an initial mandate to safely reduce debt.”

“We will do this with Fuzion’s Bonds product, allowing us to offer the community discounted $KUJI, with a range of maturities and vesting schedules to minimise long-term price impact.”

Related: DeFi protocol removed an important line of code that led to a $212K hack

Kujira community pool proposal

The team also proposed that the Community Pool be migrated to the Operational DAO to allow “a longer and more considered voting period for grant request, as opposed to the regular 48 hours.”

“Over time, the Foundation staking positions will also be transferred to the DAO, providing a sustainable source of revenue into the future.”

According to the Kujira X announcement, the team plans to deliver the roadmap for “BOW v2, USK v2, GHOST v2 and Perps” over the following months.

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