Across’s acx surges 80%, significantly outperforming bitcoin, following intentions to eliminate its DAO framework.

The team behind the bridging protocol aims to trade ACX tokens for equity in a newly established U.S. C-corporation or buy out holders at a 25% premium, marking a significant shift from a token-based to a conventional corporate framework.

What to know:

• Across Protocol has suggested disbanding its DAO and token system to establish a U.S. C-corporation, contending that a conventional entity would facilitate securing partnerships with institutions and revenue arrangements.
• The initiative would allow ACX holders to either exchange tokens for equity in a new firm, AcrossCo, at a 1:1 token-to-share ratio or liquidate their tokens for USDC at $0.04375, representing a 25 percent premium over the recent 30-day average price.
• ACX surged approximately 80 percent following the announcement, with trading volume increasing to around 3.5 times its market capitalization, as traders consider whether the buyout premium or equity option provides greater potential ahead of a governance vote on March 26.

A DeFi protocol has recently proposed transitioning to a private structure, as its management believes the current DAO framework hinders the closure of institutional agreements.

On Thursday, Across Protocol’s ACX token rose by 80% to $0.06 after the team behind the cross-chain bridging platform released a ‘temp-check’ proposal to eliminate its token framework and shift to a traditional U.S. C-corporation.

"As Across expands our collaborations with institutional and enterprise partners, the token and DAO framework has significantly affected our ability to finalize partnerships and integrations," the proposal states. "Shifting to a standard legal structure would greatly enhance our capability to engage in enforceable contracts, structure revenue agreements, and provide more value to Across stakeholders."

"At current ACX valuations, we believe the Across Protocol is significantly undervalued. The proposed structure gives us an opportunity to explore new ways to foster growth while acting in the best interests of the broader Across community."

A temp check in DeFi governance is essentially a non-binding survey that assesses community sentiment prior to an official vote. It allows the team to determine whether there is sufficient backing to proceed as a formal governance proposal, which would then be voted on by token holders.

This initiative would present token holders with two options: convert their ACX for equity in the new company or sell their tokens for USDC at $0.04375, a 25% premium over the preceding 30-day average trading price.

The token was trading at approximately $0.033 before the proposal was announced. The immediate spike to $0.07 before stabilizing around $0.06 indicates the market’s valuation of the buyout minimum, although the current price already exceeds the proposed $0.04375 buyout, suggesting traders are anticipating either a higher offer or that the equity option holds more value.

In contrast, BTC is currently experiencing stable trading, as per CoinDesk market data. The CoinDesk 20, which tracks the performance of major digital assets, is also trading steadily.

The process is simple. A new entity named "AcrossCo" would possess all protocol intellectual property and oversee development. Token holders with more than 5 million ACX would be able to convert to equity directly.

Smaller holders could obtain equity through a no-fee SPV structure, requiring a minimum of 250,000 ACX, roughly $10,000 at current valuations. All participants would be treated equally at a 1:1 token-to-share ratio, irrespective of their holding size.

Those who prefer not to take equity can opt for the USDC buyout at the 25% premium. The buyout period would commence within three months of the proposal’s approval and remain open for six months, financed by the protocol’s liquid assets.

A community call is scheduled for March 18, formal discussions will take place until March 25, leading to a Snapshot vote on March 26. If approved, the conversion would initiate in early April.

Is the DAO vision dead?

DeFi advocates have long contended that tokens and DAOs surpass traditional corporate frameworks in establishing decentralized infrastructure.

Across is among the first protocols to publicly assert the contrary, suggesting that the token framework is hindering growth and that a C-corporation would provide greater value to the same stakeholders.

Risk Labs has noted that the token has been "significantly undervalued" and characterized the proposal as an opportunity to "double down on Across" through a structure that institutional partners can genuinely comprehend.

The 24-hour trading volume of $149 million is approximately 3.5 times the token’s market cap, reflecting the fervor of speculative interest surrounding the proposal.

Whether this interest translates into support for the conversion or merely serves as a trade on the buyout premium will be determined by the forthcoming two weeks of governance discussions.