The governance token for the NFT trading protocol Sudoswap surged over 225% after a proposal to liquidate the project. A pseudonymous delegate proposed distributing roughly $800,000 in accumulated protocol fees to SUDO token holders. If the vote passes, each token could be redeemed for approximately $0.03 in Ethereum, triple its pre-proposal value, prompting traders to buy in anticipation of profit.
Traders have pushed up the price of a forgotten crypto token over 225% following a proposal to distribute leftover assets to holders. The plan involves a pseudonymous delegate’s proposal to Sudoswap’s DAO to claim approximately $800,000 in fees.
If the vote passes, holders can redeem each SUDO token for around $0.03 worth of Ether. This potential yield has attracted buyers hoping for a return.
The scheme is termed a “rage quit” in DeFi, where token holders propose liquidating a protocol’s remaining funds. “The rage quit smart contract has no time limit, and is opt-in,” the proposal stated.
Similar dissolutions occurred at Hector Network and Parrot Protocol. The maneuver is akin to “raiding,” where activists buy governance tokens to liquidate undervalued treasuries.
Sudoswap is an onchain automated market maker for NFTs built on Ethereum. It launched in July 2022 and airdropped its governance token in early 2023.
The protocol generated almost $5 million in fees over its lifetime according to DefiLlama data. Interest and token value plummeted alongside the broader NFT market decline.
The proposal also aims to prevent new token minting by transferring contract ownership to a burn address. This would remove the risk of a potential governance attack.
The vote to distribute the fees begins on March 28, with three days for token holders to cast ballots. Sudoswap founder Owen Shen did not immediately respond to a request for comment.
