Legal battle avoided after YGG and Merit Circle DAO agree to a deal

cointelegraph.com:

A potential legal battle has been prevented between the Merit Circle decentralized autonomous organization’s (DAO) backing company Merit Circle Ltd and Yield Guild Games (YGG) after the organizations reached a deal after the DAO originally voted to remove YGG.

Merit Circle Ltd is a company that created the Merit Circle DAO to help gamers interested in play-to-earn games by lending items from its treasury to be used for gameplay as well as delivering educational content.

Originally, the DAO passed a proposal that would cancel YGG’s Simple Agreement for Future Tokens (SAFT) and refund it only with its initial 175,000 USD Coin (USDC) seed contribution.

Despite some acrimony, YGG has still walked away with ten times its initial investment.

The improvement proposal, called MIP-13, passed on May 28 alleging YGG provided a “lack of value” to the DAO and the guild was actually a “top competitor” to Merit Circle, not a partner. The proposal would “trim the fat” from the DAO to “ensure only those who want to see Merit Circle succeed remain”.

But, the passing of MIP-13 may not have honored a legal agreement between Merit Circle and YGG which would see YGG receive tokens in return for its financial contribution toward Merit Circle.

YGG said in response to the proposal that it wasn’t clear what legal authority the DAO has to nullify a contract Merit Circle Ltd signed on its behalf and that no condition existed for Merit Circle to cancel the contract “regardless of how this has been presented by them to the community.”

Merit Circle agreed upon a counterproposal with YGG to honor the legal agreement. It was posted and unanimously passed on June 9 and the DAO bought out YGG’s fund allocation.

This netted the guild 1,750,000 USDC, a ten times