On The Path To Recovery: Snowdog DAO’s First Proposal
The story of Snowdog begins on November 14th, 2021, when a cute puppy icon was shared by the Twitter account of SnowbankDAO, a fork of Olympus DAO conceived on the Avalanche Network. The adorable face was accompanied by the cryptic question, “Are you ready to play a little game?”
As it turned out, thousands of Avalanche users were ready to play a little game, and in just eight days the Snowdog project raised over US$ 45 million, a historical record for DeFi. Everything was going well for Snowdog, or so it seemed.
The Snowdog website laid out a simple eight-day roadmap. During the first five days, users could mint Snowdog tokens (SDOG) in exchange for a variety of assets, then stake their SDOG to earn yield to the tune of “the largest number you have ever seen in your life”.
After five days, minting ceased and for the final three days, users were able only to stake. On day eight, all funds in the Snowdog treasury were to be used to orchestrate one large buyback from the open market. Anticipation grew strong for the imminent “god candle”, that would surely result from US$ ~45 million entering an illiquid pool, and spurred on by the Snowdog twitter account posting images of the size of the Treasury funds for the buyback and repeated messages about being ready to “play a game”.
The finale was an unfortunate and unparalleled failure (that is, excluding premeditated hacks and code exploits). On day eight (the date marking USA Thanksgiving), something changed. The liquidity was pulled from the Number 1 DEX on Avalanche (the highly reputable and well regarded Trader Joe) and moved to a private AMM pool controlled by Snowbank. The assets in the pool (SDOG to MIM) were proportioned as if the buyback had already occurred. Players were glued to their PCs/laptops in confusion and excitement.
When the Snowbank AMM was finally opened to the public, it was revealed that slippage was locked at 99%. Any attempt to sell carried the risk of losing 99% of value. Players had only microseconds to weigh this risk and make a decision, as the market price of SDOG plummeted 95% over the course of ~30 seconds from the open.
Sadly, the average user had little shot at exiting in profit. In fact, only three wallets managed to sell above the expected buyback valuation (one wallet sold 139 SDOG for over US$ 10 million). Theories arose as to how the first three wallets managed to extract the lion’s share of value, many suggesting foul play, and the Snowdog community turned to the founding members of Snowbank for truth and compensation.
Ex-post comments and actions of Snowbank were unsatisfactory to the Snowdog token holders, as Snowbank proceeded to renounce ownership of Snowdog (as they had premeditated), this in spite of their collective failure in executing as advertised, leaving the future of Snowdog in the hands of its investors. Snowbank’s only remedial words on Snowdog included the promise to hand over all assets, including social media accounts, Discord server, SDOG tokens and SDOG-MIM LP tokens over to the SDOG community, unconditionally.
Down 99% with nothing to lose, the abandoned community pooled their brains and skill sets to build a new DAO from the ground up, the Snowdog DAO, a DAO that’s aligned with its core values - transparency, community and memedom.
United as one, the new Snowdog DAO empowers investors to directly vote on protocols, leadership roles, treasury spending, and more via https://snapshot.org/#/sdogdao.xyz. As a final test of Snowbank’s management’s integrity and purported desire to remediate their collective failures, the newly formed Snowdog DAO will be voting on the course of action pertaining to said assets through community governance today (starting 12:25 UTC 03 December 2021), as detailed in its first DAO proposal: view here, and it seeks full compliance by Snowbank’s management to the outcome of the Snowdog community vote.
Join the dog pack and together we will become the world’s largest, community governed DAO.
