"rage-quit": Protection Mechanisms and Misunderstandings in the DAO Sphere

"Rage-quit" is abbreviated as "怒退" in the DAO field, and it is a concept that has gradually gained attention with the development of DAOs. As more and more DAOs face forking, founders leaving, or even liquidation, this term has started to appear frequently in various reports. However, it is worth noting that there are considerable misunderstandings regarding the concept of "rage-quit", and even some foreign professional media often misuse this concept.

Concept Origin

At the 2019 Ethereum Denver conference, Ameen Soleimani and his team released the Moloch v1 protocol, which is a simple protocol for creating donation-based DAOs. Compared to other complex DAO operating systems, the core of Moloch v1 has just over 400 lines of code, making it easy to use and convenient for people to pool funds and manage them collectively.

In DAO governance, minority opinions are inevitable. Typically, decision-making follows the principle of "the minority obeys the majority." However, this also brings risks: the majority may abuse their advantage and infringe upon the interests of the minority. To prevent this, the Moloch protocol introduces the "rage-quit" mechanism.

The mechanism of "rage-quit"

When a member opposes a proposal but the proposal is still passed, the Moloch protocol provides a 7-day grace period. During this time, members who voted against can choose to "rage-quit" and reclaim their remaining rights in the contract before the proposal is executed.

Key characteristics of "rage-quit" include:

1. Enforced by smart contract code.
2. Only members who voted against in the previous proposal are allowed to execute.
3. Can only be done during the grace period after the proposal has been approved but not yet executed.
4. Members can only retrieve the remaining shares in the contract.

It is important to note that members need to have a direct, traceable historical investment in the DAO treasury in order to exit. If a member has not contributed funds to the DAO treasury, they cannot execute a "rage-quit."

In the Moloch V1 protocol, "rage-quit" is the only way to withdraw funds from the protocol, and even the funded project parties must use this method to withdraw funds.

Protocol Evolution

After the successful launch of the Moloch v1 protocol, several teams developed Moloch v2 based on it. The new version adds features such as support for co-investment, expanding its application scope. This has contributed to the rise of Investment DAOs, such as The LAO, Flamingo, and MetaCartel.

The investment DAO based on the Moloch V2 framework also supports "rage-quit", but the situation is more complex. As V2 serves as an investment protocol, it requires consideration of the confirmation and splitting of rights for invested assets, making "rage-quit" more complex in terms of code and details compared to V1.

Scope of "rage-quit"

In fact, the structure and operation of most DAOs do not meet the basic conditions for implementing "rage-quit." Many DAO members do not directly inject funds into the treasury, so membership is not directly linked to the treasury balance, limiting the applicable scenarios for "rage-quit."

Although we sometimes see DAO founders proposing "rage-quit", this is usually the result of negotiations among parties, unless there is a clear correspondence or agreement between the founder's interests and the DAO treasury funds.

Nouns DAO is a special case, as its new contract after the fork supports the "rage-quit" functionality. This is mainly because Nouns is essentially more like a donation-based DAO, with each successful Nouns auction bringing traceable funds to the treasury.

Conclusion

The evolution of the concept of "rage-quit" reflects the fusion and evolution of technology and culture. Each innovation and misunderstanding has driven thinking and improvement in the DAO field. Today's "rage-quit" is different from its original definition and represents a continuously evolving institutional innovation.

As a decentralized organization model, DAO is still in its early stages of development. "rage-quit" is not just a function, but represents the exploration and pursuit of freedom, justice, and community rights. As DAOs evolve, we will continue to witness and participate in the definition and improvement of the operational mechanisms of digital society.