Kujira Unveils Operational DAO Proposal as Native Token KUJI Tumbles 50%

DeFi platform Kujira encountered a roadblock when the team deployed a strategy to boost liquidity and activity in the ecosystem, utilizing operating cash to leverage deployments.

However, this move coincided with market volatility and rapid sell-offs, triggered by “exploits, socially engineered attacks and fallouts within the ecosystem.”

In an official X (formerly Twitter) post, the Kujira team announced a proposal that could impact the platform’s future. The team plans to create the Kujira Operational DAO, a decentralized autonomous organization (DAO) that will govern the platform’s operations.

GM all. We’d like to address the current events.

As a team we thought the best use of a portion of ops funds would be to leverage and deploy across the ecosystem in order to bootstrap liquidity and activity. We genuinely felt like this was the correct course of action at the… pic.twitter.com/qBw9w6y94b

Impact on the price

The foundation’s liquidation of its leveraged liquidity position led to a sharp decline in the price of Kurjia’s native token, KUJI. According to Coinmarketcap, Kujira’s KUJI coin is down 52.16% daily, while the chain’s total value locked (TVL) has decreased 22% to $38 million in the last 48 hours.

The foundation attributed the liquidations to poor timing, explaining that the rate of sales made it “impossible” to defend their positions and that their leveraged deployments coincided with the occurrence of “exploits, socially engineered attacks and fallouts within the ecosystem.”

The team clarified that despite their “best efforts” to maintain employment safety, the volume of sales made this unachievable.

“Although this was planned by a select few, we fully accept responsibility for the position’s reaching this point, and we are truly sorry that it affected the price.”

The team also stated that they accept responsibility for their actions and regret the impact on the price. “We understand it hurts, even if it’s only temporary, and we apologize.”

Within the Cosmos ecosystem, Kujira is a blockchain that serves as a decentralized hub for finance. A decentralized exchange, a lending platform, and a decentralized stablecoin called USK are some of Kujira’s main features. The network also has a mechanism that allows users to liquidate their undercollateralized positions. Over $42 million in value is currently locked on the blockchain.

“As a team, we thought the best use of a portion of the ops funds would be to leverage and deploy across the ecosystem to bootstrap liquidity and activity,” the team stated in their statement on Telegram.

They also claimed that some individuals specifically targeted their positions, but unfortunately, other attacks were also occurring simultaneously. Since these roles were created, there has been continuous fighting as people have targeted the team’s positions.

In addition, the Kujira team disputed claims made on X by “certain influencers,” suggesting that the current situation is a “rug.”

The community reacted differently to the DeFi platform team’s public statement. For example, Blockchain Ecologist called the decision “grossly irresponsible management.”

The team refuted claims that the entire treasury is at risk, stating that 14 million native KUJI tokens are still “safe and sound in the treasury.”

The Kujira Operational DAO would oversee the core protocols and the Kujira Treasury “with an initial mandate to safely reduce debt,” according to the plan.