Tally CEO states, ‘Gensler and Biden were more favorable for cryptocurrency,’ as DAO governance platform ceases operations.

End of DAOs? Firm behind Uniswap and Arbitrum governance says easing regulation made decentralization optional

Dennison Bertram (left), Tally co-founder and CEO and Rafael "Raf" Solari (right), Tally co-founder and CTO

What to know:

• Tally, a prominent governance platform for over 500 crypto DAOs including Uniswap and Arbitrum, is ceasing operations after six years as CEO Dennison Bertram states that the regulatory and market conditions that warranted on-chain governance have diminished.
• Bertram contends that the SEC under Gary Gensler effectively mandated decentralization due to legal risks, but the more lenient approach of the Trump administration has rendered DAO-style governance optional, thus reducing the need for tools like Tally.
• The closure of Tally also highlights a wider trend of industry consolidation and the shortcomings of the “infinite garden” concept, as the cryptocurrency sector has not generated the extensive ecosystem of consumer applications that was once anticipated and now competes with AI for talent and focus.

The CEO of the largest Decentralized Autonomous Organization (DAO) governance platform in the crypto space asserts that the Biden administration was more favorable for his industry than the current one — and is shutting down his company to illustrate this point.

Tally, which facilitated on-chain governance for Arbitrum, Uniswap, ENS, and over 500 additional DAOs, will conclude its operations following six years, as CEO Dennison Bertram revealed today in a blog entry.

Crypto protocols are governed not by executives or boards, but by decentralized autonomous organizations, or DAOs, where token holders vote on various matters including fee structures and software updates.

In practice, engagement is frequently low and decision-making is sluggish, resulting in a small group of active participants directing billion-dollar networks. Tally established the infrastructure that enabled crypto democracy, offering the voting mechanisms, delegation tools, and dashboards utilized by major DAOs like Uniswap and Arbitrum to manage their governance activities.

In a discussion with CoinDesk, Bertram indicated that the two factors that maintained the demand for governance tools — regulatory pressure and an expanding ecosystem of decentralized applications — have both dissipated.

Across Protocol recently suggested dissolving its DAO entirely and transforming into a U.S. C-corp, claiming the token model was hindering institutional collaborations. Its ACX token surged 80% on this announcement.

Last year, the Solana-based exchange Jupiter and NFT collective Yuga Labs both moved away from their DAO frameworks, with Yuga CEO Greg Solano describing his project’s governance as “sluggish, noisy and often unserious governance theater.”

“There’s an inherent conflict between establishing a collaborative, decentralized system and basing it on crypto economics,” Bertram stated. “The crypto economics suggest we can achieve some form of balance because everyone will act in their own self-interest, which embodies a zero-sum, profit-maximizing mentality.

Gensler forced decentralization. His absence is undoing it

According to the SEC’s interpretation of securities law during Gary Gensler’s tenure, a token risked being classified as a security if a distinct group was making managerial decisions that influenced its value, one of the central elements of the Howey Test.

The industry’s reaction was to distribute decision-making through DAOs, dispersing control across numerous wallets to ensure no single entity was perceived to operate the network. Governance structures and tools such as Tally were not merely features — they were integral to a legal strategy.

Bertram envisions this as the conclusion for his company: if teams no longer assume they will face penalties for functioning like traditional firms, decentralization ceases to be a necessity and becomes discretionary, with many teams opting not to invest in it.

“The [Trump] administration is clearly indicating that you’re not at risk, proceed with your activities,” Bertram stated. “That provides substantial freedom for existing organizations. It’s not entirely clear whether decentralization is necessary, or what form it should take.”

The garden isn’t infinite

The regulatory change alone did not lead to Tally’s demise. The company’s business model relied on a secondary assumption: that the Ethereum ecosystem would yield a vast, infinite garden of protocols and applications, each requiring governance infrastructure.

“For Tally and similar organizations to thrive, it’s insufficient to have a Uniswap, an Aave, one or two L2s, and that’s all,” Bertram remarked. “That’s a distinctly different kind of enterprise consultancy operation.”

This infinite garden hypothesis was central to Tally’s $8 million fundraising round last year.

“A significant portion of our premise in our last round was that there would be thousands of L2s, which was a notion that met with no resistance,” he noted. “Currently, there are not, in the immediate future, thousands of L2s. And there may never be.”

Instead, the sector has consolidated around a limited number of dominant protocols.

According to Bertram, crypto has identified product-market fit in payments and speculation such as prediction markets, but the robust consumer application layer that would have supported a governance infrastructure business has yet to materialize.

“There isn’t a venture-funded business in governance tools for decentralized protocols,” he expressed in a blog post announcing the shutdown. “At least not at this point.”

Retail doesn’t care about crypto

Beyond the governance dilemma, Bertram perceives a more fundamental issue for the industry.

“AI has truly become the new narrative of the future, and its narrative is significantly broader and more all-encompassing than crypto,” he stated. “What this results in is the attraction of the best minds. The most thrilling opportunities are not found here, so we miss out on the most innovative founders and builders.”

Bertram expressed continued belief in the industry but no longer subscribes to the notion that it is in its early stages.

“People frequently say, it’s still early,” he remarked. “I’ve been involved since 2011. I’m uncertain. It doesn’t feel early.”