Several members of the Umami team have resigned as a result of O’Donnel dumping his UMAMI holdings.
The price of UMAMI token fell 50% following CEO’s “rugging”.
Source: Unsplash
Umami Finance CEO Alex O’Donnel has dumped his large share of UMAMI tokens.
Umami Finance is a set of smart contracts, which operates as a DeFi protocol providing yield vaults for risk-hedged real yield on crypto assets including ETH, USDC, and BTC.
DeFi vaults are a collective, auto-compounding strategy similar to asset management companies or mutual funds. Through collective investment using a specific strategy, the return on provided funds is optimized, saving investors’ spendings on transaction fees.
Although yield vaults still entail risk, the rug-pull came unexpectedly. The Umami team released a statement on the Umami’s Discord channel.
“The team resigned today from Umami labs to try and move Umami back towards decentralization and a DAO structure. CEO has dumped all of his tokens via his address here, 0x21dF3E7371A58eB0e2248F1362eB5fa01fC9B34F.”
The Umami team assured the community that they won’t be abandoned.
“The treasury assets are safe and in control of the multisig who will obey the direction of Umami DAO and its token holders. Team plans to move forward with a DAO structure and release vaults as planned with the Umami token having the same revenue claim as promised. Umami DAO retains control of both the code base including our vault products and the front end (Umami.finance).”
The statement concluded with an outline of the next steps for Umami, which included reinstating the Umami team — minus Ex-CEO — in order to proceed with Umami and launch vaults, as well as to host an ask-me-anything in order to answer community questions. This statement was met with much support.
As a result of O’Donnel’s actions, users were temporarily unable to withdraw funds. The team has taken upon themselves the task to remedy the situation, as well as give Umami’s community the ability to make decisions regarding the changes and future of the protocol to-be DAO.
It is important to note that rug-pulling, which has plagued numerous crypto-projects, is not a risk exclusive to crypto, and is an even more common occurrence in traditional finance.
