DAO Downfalls: What Happens When Tokens Unlock?

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The recent events surrounding ApeChain’s DAO and the AIP-596 vote reveal a striking convergence of governance overhaul and major tokenomics activity that’s emblematic of the current state of crypto governance. On June 12, 2025, Yuga Labs, the force behind Bored Ape Yacht Club, introduced AIP-596, a proposal to sunset the ApeCoin DAO and transfer all assets, governance, and operational control to a new entity, ApeCo, run by a streamlined, professional team.

The rationale, as outlined by Yuga Labs CEO Greg Solano, was that the DAO had become slow, inefficient, and vulnerable to low-quality proposals and governance attacks, necessitating a shift to a more centralized, agile model focused on ApeChain, BAYC, and Otherside.

The vote itself has been almost unanimously in favor, at one point showing over 98% approval with more than 5 million votes cast. This overwhelming support, especially given historically low voter turnout in DAO proposals, raises eyebrows about the true distribution of power within the ecosystem. Large holders, including venture backers and partners, retain outsized influence, and the rapid, nearly unanimous passage of such a transformative proposal suggests strong alignment, or at least coordination, among those with the most at stake.

Just three days after this landslide vote, a scheduled unlock of 15.6 million APE tokens, worth about $11.17 million, hit the market. This unlock, part of the project’s long-term vesting schedule, distributed tokens to the treasury, Yuga Labs, founders, charities, and early contributors.

DAO Downfalls: What Happens When Tokens Unlock?

While such unlocks are standard in crypto, they often coincide with increased sell pressure, especially when recipients are free to liquidate their allocations. The timing, so soon after the DAO’s effective dissolution, raises questions about whether the new governance structure is being positioned to manage or absorb the market impact of these unlocks, or if the transition simply enables large stakeholders to realize liquidity with less scrutiny from a now-defunct community governance process.

The combination of a decisive governance shift and a major token unlock is not mere coincidence but reflects the broader trend in crypto where project founders and core teams, faced with the inefficiencies and risks of token-holder DAOs, are reclaiming authority to ensure operational control and strategic direction.

The AIP-596 proposal and its near-unanimous approval signal a foundational change: ApeCoin’s future will be shaped less by open, decentralized voting and more by a select group of stewards with the power to act decisively, and, if needed, to weather or even capitalize on significant tokenomic events like unlocks.

The events as “just your average Tuesday in crypto governance” is anything but ordinary. They exemplify how governance theater can mask deep structural shifts, and how major financial events, like token unlocks, are often closely intertwined with changes in who holds the reins. For observers and participants alike, it’s a reminder that in crypto, timing is rarely accidental, and governance outcomes often reflect the interests of those with the most to gain or lose.