Inverse Finance Takes Over Tonic Finance in Likely Foremost DeFi Protocol Merger
For the foremost time in decentralized finance (DeFi) sector, Inverse Finance’s governance has given approval for the takeover of Tonic Finance in a $1.60 million dollar agreement that will bring Tonic under the control of Inverse.
After several weeks of discussion, at the start of April, members of the Inverse Finance DAO started voting on a suggestion to take over Tonic and rope in its only coder, Tony Snark.
The suggestion swiftly breached the 4000 token approval level and is on course to be endorsed without even a single vote of dissent. As an outcome, Snark will be paid 250 INV (native governance token of Inverse) with immediate effect and is poised to be rewarded another 250 after it turns out to be a “full-time contributor”, along with an additional 1000 INV vested for a period of two years.
Tonic, which developed dollar-cost averaging vaults (a competing product to Inverse’s foremost product), will be operating under the Inverse umbrella.
Inverse Finance founder Nour Haridy said the following with respect to voting:
“Tony will be joining Inverse as a full time dev to lead the entire Inverse DCA product lineup including both our yield vaults and the acquired Tonic Finance Swirl vaults.”
Even though there is some discussion and assumption about mergers and acquisitions in the DeFi sector, there is little development in this regard. The latest example was a series of “mergers” by Yearn.Finance last year, but the kind of acquisitions is to a certain extent murky.
Leo Cheng of C.R.E.A.M Finance stated that there may be ultimately a YFI environment meta-token.
On the contrary, the Inverse/Tonic merger is much near to what a person would experience in the conventional finance world, where both the tech and coders work on a same platform. This was assisted partially by the Tonic’s governance token, which is yet to be disbursed, and discussions could happen with Snark in a straight forward manner.
Haridy said “A governance token would make an acquisition a lot more complicated since it’s not possible to market-buy the entire token supply. If we skip buying the governance token, then the token becomes useless. I think it’s worth exploring better ways to acquire projects with governance tokens though.”
Haridy, who works full-time on DCA, has addition time to commit to Anchor, which is Inverse’s synthetic stablecoin covenant. The advancement is likely another step towards transforming Inverse into a complete DeFi ecosystem within 1inch or Sushiswap that offer several facilities.
That feeling when your DAO is completely aligned in vision. Imagine how much you can get done.
— Dennison Bertram (@DennisonBertram) April 29, 2021
Haridy said “We’re headed towards decoupling each product from the Inverse brand. Our existing DCA vaults will likely be branded under Tonic similar to how our lending product is branded as Anchor. Both may have their own core devs, marketing, domains, communities, etc under the umbrella and the funding of Inverse DAO.”
Haridy further stated that he trusts that there will not be additional DAO based M&A (merger and acquisition) activity after Haridy further stated that he trusts that there will further DAO based merger and acquisition transactions as Inverse has now opened the channel and that it could make itself available for additional takeovers.
“I hope that our work here sets a new precedent for projects merging with DAOs instead of going public. We certainly plan on exploring more M&A opportunities In the future. We’re also open to talk to any new DeFi projects out there at any stage.”