Leading Solana revenue generator Zinc faces governance battle with investor DAO

Zinc, one of Solana’s top revenue-generating protocols, is currently in the middle of a governance dispute with MetaDAO over a proposal that would allow Zinc holders and its founder to buy out ZKFG token holders at $0.15.

The governance proposal will also see that the associated Turbine Cash DAO LLC is taken private.

Both sides said on June 14 that they are in private talks to resolve the matter, though the standoff has already drawn accusations of investor abandonment from some community members.

What is behind the dispute between Zinc and MetaDAO?

MetaDAO released a proposal called proposal ZKFG-007, which, if implemented, would create an escrow-funded buyout path for ZKFG holders (the token representing Zinc’s listing on MetaDAO’s futarchy governance platform) at $0.15 per token. 

If funded, the proposal would also take Turbine Cash DAO LLC private, removing it from MetaDAO’s decentralized governance structure.

On June 14, reports emerged that Zinc had rejected proposal 007 because it had run its own proposal called 006, which proposed a similar buyout. Proposal 006 passed but was not executed.

According to the 007 proposal’s authors, which include Proph3t, the cofounder of MetaDAO, the reason why there is proposal 007 is because of the flaws of the initial proposal, 006. 

They stated that the proposal did not make provisions for IP rights transfer or who will be receiving the rights. Also, the proposal did not include executable instructions, and it went against their policy on buybacks above net asset value (NAV), among others.

Zinc posted on X that it is “in an ongoing conversation with the MetaDAO team regarding proposal 007” and that “a resolution is being worked on that serves the best interest of all parties involved.” The protocol said it would release full details jointly with MetaDAO once an agreement is reached.

Proph3t confirmed private discussions were underway. He added that the team is “actively pursuing a good resolution here, monitoring the situation closely, and thinking of ways to improve the mechanism.” 

He stopped short of sharing more information, citing the legal implications of tweeting things publicly.

How is the community reacting to the dispute?

Community members are divided on the dispute with Malisha, the cofounder of Streamflow, asking in a thread on June 13 if Zinc was rugging its investors, adding that it is “a pretty serious accusation.”

The White Whale, another prominent Solana commentator, pushed back on Malisha’s question the following day, writing that “this is not about poor early investors being abandoned as some accounts try to spin the narrative.”

White Whale gave an account of what happened, the dispute, and the current state of efforts to reach a resolution, while also calling out Malisha and other actors who are pushing FUD, according to him.

Nearly $60M in annual revenue makes dispute high stakes

Zinc has seen considerable growth since launch, and this current dispute has the potential to impact that growth as it carries huge financial weight.

The gamified mining protocol crossed 500,000 SOL in cumulative round volume (roughly $33 million) in under 17 days after launch.

DeFiLlama data shows that Zinc has generated approximately $3.01 million in revenue over the past 30 days, putting its annualized revenue run rate near $57.8 million.

Zinc is one of the highest revenue-generation protocols on Solana and has a market capitalization of $3.21 million.

Solana’s DeFi sector has generated $2.36 million in total application revenue over the most recent 24-hour period tracked by DefiLlama, and Zinc alone accounted for $469,504 of that in the same window, which is nearly 20% of the total.

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