A legal battle was averted after YGG and Merit Circle DAO reached an agreement
The approval of an investment strategy put into question a legally binding agreement between the companies, and the Merit Circle DAO consented to a counteroffer to assure a resolution.
After the Merit Circle distributed autonomy group’s (DAO) funding firm, Merit Circle Ltd. and Yield Guild Games (YGG) struck an agreement after the DAO had agreed to ban YGG, a major court fight was avoided.
Merit Circle Ltd is a corporation that founded the Merit Circle DAO to assist players who are engaged in play-to-earn games by borrowing things from its treasury and giving instructive content.
Originally, the DAO approved a plan to dissolve YGG’s Simple Agreement for Future Tokens (SAFT) and merely repay the seed investment of 175,000 USD Coin (USDC).
Despite several squabbles, YGG has made a tenfold profit on its upfront outlay.
The MIP-13 enhancement suggestion, which was approved on May 28, said that YGG gave a “lack of value” to the DAO and that the group was a “big contender,” not a collaborator, to Merit Circle. The idea would “shave the fat” from the DAO to “retain just that want to see Merit Circle flourish.”
However, the passage of MIP-13 may have violated a signed contract between Merit Circle and YGG, under which YGG would get assets in exchange for its monetary assistance.
In reaction to the suggestion, YGG stated that it is unclear what lawful power the DAO has to void an agreement Merit Circle Ltd entered on its own and that there was no precondition for Merit Circle to rescind the contract “independent of how this has been represented to the society.”
To uphold the signed contract, Merit Circle and YGG came up with a counteroffer. On June 9, it was uploaded and overwhelmingly passed, and the DAO purchased YGG’s money allotment.
The guild received 1,750,000 USDC as a result, a tenfold profit on its initial seed payment.
Merit Circle and YGG both expressed satisfaction with the decision on June 14, noting that the answer “still meets the wish of the Merit Circle membership, but was also satisfactory to YGG.”
They went on to say that because the initial proposal conflicted with Merit Circle’s previous legal arrangement with YGG, it would have very certainly resulted in court proceedings.
Both parties acknowledged the “threat an instance like this could establish for the Merit Circle DAO and the sector as a whole because contracts are not upheld, and shareholders are not treated with respect.
“While the legal question might certainly be debated for hours,” the groups added, “all sides felt it was wiser to settle.”
“Both sides would avoid a costly, time-consuming trial system with higher uncertainty.” Neither party was forced to agree, but both chose the positive way to assist Merit Circle to move ahead.”
While the solution ends their formal connection, Merit Circle and YGG both stated that they will remain to “give their all to developing the bitcoin gaming environment” and that Merit Circle will remain to get “ongoing support” from YGG.
