Exchanging equity for tokens, Across leads a "rebellion," and the DAO model faces a reality check

Author: Nancy, PANews

A DeFi project called Across Protocol, which has been operating for four years and raised tens of millions of dollars, recently made an unexpected decision to dissolve its DAO and transform into a private company.

This move by the longstanding protocol is not just a structural adjustment; it reflects deeper issues with DAO governance models and token economics.

Planning to become a U.S. corporation, token holders will have equity or USDC exit options

On March 11, Across released a temperature check proposal to transition from a DAO structure to a U.S. C-corp. This marks a significant governance shift for Across and is the first of its kind in the crypto space.

Following the proposal, the price of the ACX token unexpectedly surged. According to CoinGecko, ACX increased by 94.9% in the past 24 hours but remains about 96.2% below its all-time high. On-chain analyst Ai Yi’s monitoring suggests that the largest holder’s address would need to see a 5.66x increase to break even.

As a leading player in the cross-chain sector, Across has been running for four years. During this time, it raised approximately $51 million through two funding rounds, backed by prominent institutions such as Paradigm, Coinbase Ventures, Bain Capital Crypto, Multicoin Capital, and Hack VC. To date, the protocol has handled over $58 billion in cross-chain transactions.

Despite this, Across has decided to pursue this transformation. According to the proposal, the new entity, AcrossCo, will serve as the operating company behind Across Protocol, taking over all protocol intellectual property and handling development, partnerships, and commercialization. Generally, registering as a C-corp is the mainstream choice for startups seeking rapid growth, VC/ institutional funding, and potential IPO or acquisition.

To facilitate this transition, Across plans to exchange or acquire equity via the ACX token.

This plan offers two options for ACX token holders: one is equity exchange, where users holding ACX can convert their tokens 1:1 into equity of AcrossCo. Those holding more than 5 million ACX can directly participate, while smaller holders will do so through a free special purpose vehicle (SPV) structure; the second is a token buyback, where ACX holders can redeem their tokens for USDC at $0.04375 each, a 25% premium over the average market price in the past 30 days. The redemption window will open three months after the proposal’s approval, with a six-month redemption period. This plan has sparked arbitrage opportunities, leading to a short-term surge in ACX’s price as investors rush to buy.

According to the plan, the community will hold a conference call on March 18, with the final proposal to be published on March 26, and voting via Snapshot scheduled for April 2.

If approved, Hart Lambur also revealed that Across will focus on two main areas: one is stablecoin bridging, where Across’s innovative cross-chain architecture is currently the only feasible solution to unify various Layer 2s, sidechains, and forked Layer 1s in the crypto world. By the end of 2026, free cross-chain transfers are expected to become standard for all stablecoins. Besides Hyperliquid, Across has two undisclosed partnerships that will enable free fund transfers for users; the second is AI-powered proxy payments, allowing users to specify needs and have competing solver networks automatically execute transactions, enabling automation and personalized services.

DAO crisis and token value crisis: self-rescue plans and future considerations for tokenization of equity

Across’s decision to dissolve its DAO is not only a desperate move for survival but also reflects a common dilemma faced by most DeFi protocols today.

From Across’s statements, it’s clear that the DAO model has evolved into an invisible barrier hindering protocol expansion in real-world business collaborations. Hart Lambur tweeted that as Across deepens its partnerships with institutions and enterprises, the token and DAO structure have substantially impacted the ability to form collaborations and integrations.

He further explained that although Across has consumer-facing products, fundamentally it is a payments infrastructure. Over the years, Across has signed contracts with many top crypto projects, but due to the lack of a legal entity, it cannot sign agreements directly and must route through the Risk Labs Foundation. When engaging with traditional financial institutions, this “middleman” structure hampers cooperation, making it harder to push its infrastructure into traditional finance (TradFi) or crypto-related companies. Especially as more third parties will handle user transaction fees in the future, signing external contracts will become increasingly important. Transitioning Across’s DAO into a traditional legal entity will greatly enhance its ability to sign enforceable contracts, build revenue agreements, and create value for stakeholders.

Across’s case further highlights the existing issues with DAO governance. After years of large-scale practice, problems such as power concentration, accountability, and sustainability have become widely criticized. Besides projects like Across that struggle due to legal and compliance uncertainties, internal DAO issues include voting centralization, low decision-making efficiency, and low community participation. These issues, especially in fast-paced business environments, are major obstacles to further DeFi development.

As Stani Kulechov, founder of Aave, recently pointed out, current DAO operations are extremely challenging. Decision-making is slowed by forum discussions, temperature checks, and multiple voting rounds. DAOs tend to become politicized, with participants forming political alliances, ultimately allowing “politicians” rather than builders to prevail. Kulechov advocates that DAO governance needs reform, focusing on areas requiring collective input, such as major protocol changes and treasury strategies, while routine operations should be delegated to execution layers led by designated leaders.

Beyond governance, Across also faces the challenge of low token valuation. Hart Lambur stated that although he is a strong supporter of the token and opposes “high FDV with low circulation,” and that Across tokens were issued at a very low valuation early on, the macro environment has changed. Currently, the Across token is severely undervalued and underappreciated. For Across, the reality is that holding tokens often brings more disadvantages than benefits.

Compared to token volatility and uncertainty, transforming into a private company and adopting traditional equity incentives could provide more stable funding channels and market valuation for the protocol.

However, this approach has sparked controversy in the crypto community. Some see it as a betrayal of decentralization principles and fear it could marginalize retail investors, while others view it as a pragmatic return to reality for DeFi.

Interestingly, Across co-founder Hart Lambur revealed that future plans include tokenizing equity. However, these plans will be phased, starting with traditional equity and later considering tokenization options.

As for the future of this pioneering DeFi experiment, only time will tell.