If you’re not a cryptohead but have heard the term DAO and wondered what the hell it is, Illuvium’s just gave a pretty good demonstration. It’s voted against a plan the gaming project had in mind to stage a marketing-led, Illuvitar NFT-pack-opening contest with controversial crypto identity Su Zhu.

A DAO is a decentralised autonomous organisation – a bottom-up governance structure with no single central authority. It’s a concept that’s especially new for the gaming industry. While they might end up opening up a regulatory can of worms, yet to be fully addressed, DAO advantages are clear for crypto/blockchain projects striving to achieve the goals of like-minded groups of people.

And for Illuvium’s decentralised council (the Illuvinati Council), it turns out the idea of one of the most prominent blockchain gaming ecosystems in development having even the tiniest level of association with one of the industry’s most ire-inducing figures, just wasn’t worth the extra exposure it would’ve brought to Illuvitars.

Su Zhu is one of the founders of the imploded, now-bankrupt Three Arrows Capital (3AC) crypto hedge fund, which was embroiled in last year’s Terra Luna “crypto contagion“.

3AC was found to be involved in over-leveraged, wide-reaching risky trades that ultimately contributed to a contagious implosion effect that wrapped in many other crypto-industry companies and investors. At one stage, 3AC managed as much as US$10b in assets, but its reckless actions ultimately saw it unable to pay back lenders.

The Illuvitars event with Su Zhu, meanwhile, was intended as an eye-catching bit of promotion for the new Illuvitar NFT collectible game, Illuvium: Beyond, but has been blocked from taking place by an unanimous vote from the DAO council. 

 

What do the Illuvitar pack-opening events entail?

This particular Illuvitar NFT pack-opening contest, which was to be held between Illuvium co-founder and CEO Kieran Warwick and Su Zhu, was pitched as a “Celebrity Pack Battle”. A celebrity, in this instance, refers to a Crypto Twitter account holder with more than 10k followers.

Illuvium’s Celebrity Pack Battles pit two high-profile industry identities against each other to open “D1SK” packs of Illuvitar creature NFTs and accessories, gaining points for the highest-power Illuvitars opened. It’s a bit like a Pokémon-card pack-opening contest, if you’ve ever seen one of those.

Each Illuvium Celebrity Pack Battle, incidentally, results in a donation to the World Wide Fund for Nature.

Here was the Illuvium tweet that pitched the Warwick/Su Zhu match-up:

 

‘I fully understand the rationale behind the vote’

Aware of the rising concerns within the Illuvium community regarding the event, Warwick, who helped set up the pack battle, suggested that the matter be put to a vote to the five-member, six-month-term-serving council.

Stockhead spoke to him briefly about the council’s decision. 

How do you feel about what happened with the DAO council’s vote, Kieran?
“Well, what it did was show the flexibility and coordination of our governance structure, and so I’m ultimately glad we could decide to align with the project’s best interests.”

So you understand why the DAO voted the way it did?
“Yeah, I fully understand the rationale behind the vote. So, I had weighed up the pros and cons of involving Su Zhu and decided that the potential benefits it would bring outweighed the risks of community backlash. But… perhaps I was wrong, though!”

What were the “pros” that convinced you to reach out to someone like Su Zhu for this?

“While I knew there was a possibility of community backlash, I also believed that involving him could help us reach new audiences and attract more attention to the project. It was as simple as that, really. But like I say, I totally get the decision.”

 

Avoiding reputational risk prioritised

Two-term council member “Deraji” meanwhile gave some further insight on the DAO’s decision:

“Illuvium is working hard to be a leader in decentralised governance and the Web3 gaming space. To do so, we need to avoid potential association with unethical individuals and incidents that may impede mainstream adoption.

“The core vision of Illuvium is to focus on quality and listening to our community. In this case, the community made their collective voices heard that this event risked the reputation that the DAO has worked so hard to build. We leveraged our governance model to avoid having our most well-known figure share a stage with Zhu.”

“As a firm believer in community governance, I have full confidence in the decision made by our community and DAO,” added Warwick. “And I’ll always respect the council’s verdict. Our unwavering commitment is to provide a secure and ethical gaming atmosphere for all our users, and we will persistently strive to achieve this objective.”

 

Spreading out the decision-making power

According to Warwick, the DAO’s unanimous vote to block Su Zhu’s participation in the Illuvitar D1SK opening battle has sparked an Illuvium-community conversation around the power and responsibilities of DAOs.

Some, in the Illuvium Discord group have apparently expressed that the decision is extreme. However, Warwick noted, the council remains adamant that the DAO’s vote reflects Illuvium’s transparency, integrity and ethical values.

Stockhead also asked the Illuvium founder for his views on DAOs more broadly, and why he considers them to be important in the crypto space.

“It’s because they represent a new way of organising and governing communities that is really about giving community stakeholders a greater say,” explained the Illuvium CEO.

“In the traditional, centralised model, decision-making power is concentrated in the hands of a few individuals or entities, which can lead to issues of accountability, transparency, and trust. DAOs, on the other hand, allow for more inclusive and democratic decision-making, where every member has a say in the direction of the organisation.”

 

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