Controversy Arises Over Across Protocol: Questions Raised About DAO Fund Management and Governance Transparency

Recently, the cross-chain bridge protocol Across has been embroiled in a controversy regarding DAO governance and fund management. An industry insider publicly accused the Across team of manipulating votes and misappropriating approximately $23 million, sparking widespread discussion in the crypto community.

Across is a cross-chain bridge protocol aimed at achieving seamless asset transfers between different blockchains. The project has attracted the attention of several well-known investment institutions, including Paradigm, Bain Capital Crypto, and others. Its founding team members previously worked at the synthetic asset protocol UMA.

However, this accusation reveals potential issues in DAO governance. It is alleged that the Across team leveraged its significant holdings of governance tokens to centralize voting through multiple associated wallets, thus dominating the outcome of DAO proposals. This practice has been criticized for undermining the original intention of DAO decentralization.

The accusation also mentioned that the team manipulated the passed proposals to transfer large amounts of DAO funds to accounts that are not under community oversight. The whereabouts and uses of these funds lack transparency, with no public audit records or detailed explanations.

Specifically, in October 2023, a proposal to transfer 100 million ACX tokens (approximately $15 million) from the DAO to a private company owned by the founders raised suspicions. On-chain analysis revealed that the proposal was actually pushed secretly by project team members, who cast a large number of votes in favor using multiple wallets.

Less than a year later, the team proposed another request for "retrospective funding," asking for an additional 50 million ACX (approximately 7.5 million USD). Similarly, this vote was also alleged to have suspicions of manipulation.

This event has sparked deep reflections within the community regarding the DAO governance mechanism. Although DAOs aim to achieve decentralized decision-making, they often face issues such as power centralization, insufficient voting transparency, and potential security risks with funds in practice. For example, situations frequently occur where a small number of "whales" control voting outcomes, the voting process lacks on-chain verifiability, and treasury funds become targets for attacks.

In the face of these challenges, industry insiders are calling for improvements in DAO governance from three levels: technology, mechanism, and culture. Recommendations include adopting zero-knowledge proof technology to protect voting privacy, optimizing token distribution and voting weight design, and introducing independent audits.

This controversy is undoubtedly a warning to the blockchain governance ecosystem. DAO, as an ideal vehicle for decentralization, embodies the community's expectations for fairness and transparency. However, to achieve this goal, the industry must work together to continuously improve governance mechanisms, enhance transparency, and accountability.