[1RC] Terminate the Contract with Mr. Danya and xcrwd.io and Recover Allocated Funds

2.1 General Proposals
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Simple Summary

This proposal seeks to terminate 1inch DAO’s contract with Mr. Danya and xcrwd.io and recover the full amount of the $150,000 USD funding (the “Funding”) allocated under the [1IP-56] Grant Proposal for beta.1inch.io. Mr. Danya has failed to fulfill his contractual obligations, mismanaged funds, and has not delivered any significant results in accordance with the agreed terms.

Abstract

The 1inch DAO granted funding to Mr. Danya for the development of beta.1inch.io, a crowd and beta testing platform designed to enhance the quality of web3 projects. However, despite the passage of the agreed timeline, there is no functional product available, and the project has failed to provide any substantial deliverables. Furthermore, an analysis of the financial transactions associated with the allocated funds indicates serious mismanagement, including unauthorized token exchanges and depletion of the allocated wallet.
Given these circumstances, the 1inch DAO should proceed with the termination of the contract and take necessary actions to recover the misused funds. This will ensure the integrity of the 1inch DAO and the responsible management of community resources.

Motivation

The following points outline the rationale behind this proposal:

  1. Failure to Deliver: The original grant proposal stipulated the launch of a functioning beta testing platform by Q3 2024. As of Q1 2025, no such product has been delivered, and the existing demo lacks any reference to 1inch DAO or usable functionality.

  2. Mismanagement of Funds: The wallet (0x42985e34d66b6FfbB1A8d67646c0b75c53938a4c), which received the allocated funds, has been depleted, with only $51 USDC remaining. Transactions from this wallet show unauthorized token exchanges, including the conversion of over $15,000 USDC into 1inch tokens, which have since depreciated in value:
    Ethereum Transaction Hash: 0x147608b4b9... | Etherscan
    Ethereum Transaction Hash: 0xb0ae9d5e8f... | Etherscan

  3. Lack of Transparency and Accountability: There has been no substantial communication or reporting regarding the progress of the project. The promised platform (beta.1inch.io) remains unavailable, and the demo version (xcrwd.io) primarily promotes the founder’s own social media channels rather than serving the DAO’s interests.

  4. Potential Conflicts of Interest: A significant portion of the votes approving the initial funding came from holders of vesting tokens associated with 1inch Labs. Evidence suggests that Mr. Danya, as a team member, may have influenced these votes to secure funding for personal benefit.

Specification

To address these issues, this proposal recommends the following actions:

  1. Immediate Termination of Contract: The agreement between 1inch DAO and Mr. Danya/xcrwd.io should be terminated due to breach of terms and non-performance.

  2. Fund Recovery Measures: The DAO should initiate steps to recover the misused funds. This may include legal action if necessary.

  3. Audit and Reporting: A comprehensive audit should be conducted on all transactions related to the funding to ensure full transparency and accountability.

  4. Prevention of Future Abuse: The DAO should implement stricter due diligence and milestone-based funding disbursements to prevent similar mismanagement in future grant allocations.

Rationale

Ensuring responsible fund allocation is crucial for maintaining trust and efficiency within the 1inch DAO. Allowing such misuse to go unchallenged would set a dangerous precedent, potentially enabling further financial mismanagement. By recovering funds and enforcing accountability, the DAO reinforces its commitment to the community and ensures that resources are used effectively for the benefit of the ecosystem.

Considerations

  1. Legal and Financial Feasibility: The DAO should assess potential legal avenues for fund recovery and determine the feasibility of pursuing reimbursement.

  2. Impact on DAO Governance: Strengthening the governance framework to prevent similar instances of mismanagement in the future.

  3. Reallocation of Recovered Funds: If funds are successfully recovered, the DAO should decide on their reallocation to support legitimate, high-impact initiatives.

By approving this proposal, the DAO will take decisive action to safeguard its integrity, hold accountable those who misuse community resources, and ensure that future funding is granted to projects that genuinely contribute to the ecosystem.

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Hello Mr. Anonym!
Thanks for opening such an interesting discussion :full_moon_face:.

I would try to address all related questions clearly:

Main Point: Our platform has been built, is fully operational, and ready for launch in collaboration with the 1inch team. And also we in touch with 1inch team for all this time.

Failure to Deliver:
Yep, we didn’t manage to complete the platform by the end of Q3 2024, but we were fully prepared to launch in dec 2024. However, we decided to postpone the launch to Q1/Q2 2025 due to 1inch’s internal priorities. Like many other projects, the 1inch team was busy with important year-end feature releases and other critical tasks, so it wasn’t the right time to launch the beta testing program.

Currently, our platform is fully operational, with 95% of the proposal goals completed and the remaining features under active development. Since jan 2025, we have been in constant communication with the 1inch team to finalize launch details.
The latest update is that we have scheduled calls in early April to determine the exact launch date, marketing activities, and to train the 1inch team members on how to use our platform.

About App on beta.1inch.io:
Due to tech policy considerations from 1inch, we haven’t launched a separate beta.1inch.io domain yet. We have proposed an alternative initial launch on 1inch.xcrwd.io to speed up the launch process, but we need official permission from 1inch team to use their brand name (for domains and other staff). And again - our platform remains fully functional and stable at our main url: https://app.xcrwd.io.

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Mismanagement of Funds:
All received funds were used only for necessary things - payouts for our team members, infrastructure costs, and minimal marketing/PR efforts necessary to attract users on platfrom. Admittedly, we haveve slightly exceeded our planned budget and had to partially dip into funds originally reserved for tester rewards. We are currently exploring solutions for this issue and plan to discuss this transparently with the 1inch team in our upcoming meeting.

Also if you think $130,000 is too much for a project of our scale and with a team of five developers, a designer, a community manager, and us as co-founders, all aiming to deliver in a tight timeframe - I have to say that’s simply not the case.

Lack of Transparency and Accountability:
This is a valid point, and it’s our oversight for not providing regular updates here. We started actively posting updates to our official channel at https://t.me/xcrwd in october 2024. However, we acknowledge that we should have better informed the community about where to follow our news and updates - my sincere apologies for this oversight.
Additionally, I maintained communication with my ex-colleagues from the 1inch team and regularly shared project updates internally.
Also for clarification - xcrwd.io is our general platform landing page and has no direct connection to beta.1inch.io (details regarding beta.1inch.io domain were provided above).

Potential Conflicts of Interest:
Regarding the suggestion that “Mr. Danya, as a team member, may have influenced these votes to secure funding for personal benefit” — oh, if only I had such superpowers! if that were true, we certainly should’ve asked for more than $150,000.
On a serious note, this claim is strange because almost every proposal on the platform is openly voted on by holders of vesting tokens.

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Final words:
Since this is my first startup experience and founder role is new to me, I’ll honestly admit that building a startup is incredibly challenging. As a startup builder u constantly encounter situations you have never faced before (like this one), solving various problems around the clock, managing a team, overseeing design, finances, communications, public speaking at meetups, and community building. It’s tough — but I feel we are doing well and steadily moving forward.

If you have more questions, I’m open and ready to discuss it here

Also I dropped additional and fully updates in comments to previous topic - https://gov.1inch.io/discussion/22754

Best regards,
Your Mr. Danya

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