Governance Token Loses All Utility After Holders Vote to Remove Voting Rights

The governance token of a popular DAO has officially lost all utility after holders approved an onchain motion to remove voting rights. While the value of many crypto tokens has dropped to zero following issuance, $WEGOV is believed to be the first token whose utility has gone to zero.

WeGov, a decentralized autonomous organization (DAO) dedicated to “empowering holders through onchain governance” issued a native token to its members last year. $WEGOV, they were promised, would grant holders governance rights and the ability to expand utility through approving additional use cases for the asset.

Instead, holders, seemingly frustrated at the token’s limited functionality, elected to remove this right altogether. On February 14, the WeGov community concluded a week-long vote on the motion “Remove governance rights from the $WEGOV token.” The vote passed with 100% of participants in favor of the move.

Controversially, however, the 50,000 $WEGOV tokens that backed the motion came from just one wallet, with no other holders bothering to participate in the critical onchain vote. This means that one individual has effectively removed all utility from a token that onchain analysis shows to have more than 10,000 holders.

Careful What You Vote For

A pseudonymous X account going by the name WeGovWhale claims to have been behind the historic governance vote. WeGovWhale apparently elected to remove governance rights from the token after being frustrated by low turnout for previous votes, with the message to holders being “Use it or lose it.”

WeGovWhale asserted that, having now made their point, they would reinstate voting rights during a future governance vote, to which one X commenter responded “How will you do that? You no longer have voting rights.” In response, WeGovWhale locked their account and has not tweeted since.

Despite the passage of the controversial governance vote, some members of the WeGov community have spoken of the decision approvingly. “There was a risk that uncapped voting rights led to holders voting to add actual utility to the token. With voting now impossible, that dangerous power has been checked.”

The market responded favorably to $WEGOV’s loss of all utility, with the token up 50% at the time of publication to reach an all-time high.