"rage-quit": An important concept in the DAO space

"rage-quit" is a concept that is gradually gaining widespread attention in the DAO space. As DAOs grow and develop, more and more organizations face situations of division, founders leaving, or even dissolution, leading to this term frequently appearing in various reports. However, people's understanding of this concept often has misconceptions, and even some professional media often misuse it.

The Birth of Concepts

At the 2019 Ethereum Denver conference, the Moloch v1 protocol was introduced. This is a concise protocol for creating donation-based DAOs, achieving core functionality with just over 400 lines of code. It enables people to easily pool funds and manage them collectively.

In DAO governance, minority opinions are inevitable. Normally, decision-making follows the principle of majority rule. However, this can lead to the majority abusing their power and harming the interests of the minority. To mitigate this risk, the Moloch protocol introduces the "rage-quit" mechanism.

How "rage-quit" Works

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

This mechanism has several key features:

1. Enforced by smart contract code
2. Limited to members who voted against in the previous round of voting.
3. Can only be done during the grace period after the proposal has been approved but not yet executed.
4. You can only retrieve the remaining shares in the contract upon withdrawal.

It is worth noting that members must have direct and traceable historical contributions to the DAO treasury in order to fairly confirm remaining rights and achieve withdrawal through the contract code.

Evolution of Concepts

The Moloch v1 protocol achieved significant success, but its functionality was limited to coordinating donations. Subsequently, Moloch v2 was born, adding features such as support for co-investment, thereby broadening its application scope.

Investment DAOs based on the Moloch v2 framework also support "rage-quit", but the situation becomes more complex. v2 is an investment protocol where invested funds are converted into equity or token rights, requiring consideration of historical rights confirmation and division. Therefore, the "rage-quit" in the v2 version is more complex in terms of code and details compared to v1.

Common Misunderstandings

For most DAOs, their structure and operation do not meet the basic conditions for implementing "rage-quit". Many DAO members have not directly contributed to the treasury, so membership is not directly linked to the treasury balance, and the applicable scenarios for "rage-quit" are quite limited.

We have indeed seen cases where DAO founders propose a "rage-quit". However, this "quit" is often merely formal and is actually the result of negotiations among various parties. Unless the founder's rights have a clear correspondence or agreement with the funds in the DAO treasury, they have no right to withdraw funds upon quitting.

Conclusion

The evolution of the concept of "rage-quit" reflects the fusion and evolution of technology and culture. Every innovation and misunderstanding has driven thinking and improvement in the DAO field. Today, the "rage-quit" we discuss is no longer limited to its initial form, but is an institutional innovation that evolves with the times.

As an emerging decentralized organizational model, DAO is in its early stages of development. Every challenge guides us to explore the operational mechanisms of the future digital society. "rage-quit" is not just a function, but also represents the pursuit of freedom, fairness, and community rights.