Sudoswap token jumps 225% as traders rush to profit from DAO ‘rage quit’ proposal

Traders have pushed up the price of a forgotten crypto token over 225% following a proposal to distribute leftover assets held by the DeFi protocol it governs to holders.

On Thursday, a pseudonymous delegate who goes by statelayer Sudoswap’s decentralised autonomous organisation, or DAO, published a proposal that would claim approximately $800,000 in fees accumulated by the protocol and allow DAO members to exchange their tokens for a portion of it.

Sudoswap is an onchain automated market maker for non-fungible tokens, or NFTs, built on Ethereum.

If the proposal passes a vote, it will let holders redeem each SUDO token they own for around $0.03 worth of Ether — triple the market value of SUDO tokens before the proposal was revealed.

Those buying up SUDO are hopeful that the proposal will pass, yielding them a return of around 225% per token.

“The rage quit smart contract has no time limit, and is opt-in,” the proposal said. “SUDO may be exchanged for ETH at the fixed rate as long as sufficient ETH remains in the smart contract.”

The scheme is the latest example of what in DeFi is termed a “rage quit” — where token holders of old, forgotten DeFi protocols propose liquidating any remaining funds the protocol holds and distributing them to token holders, effectively dissolving the organisations.

In 2023, holders of Hector Network’s token voted to dissolve its DAO following claims of mismanagement. The protocol later entered receivership, with some assets clawed back.

The same year, token holders at Solana-based Parrot Protocol also voted through a similar dissolution.

DAO rage quitting is similar to another manoeuvre called raiding.”

Here, activist investors target DeFi protocols where the value of assets held by the DAO is greater than the market value of its governance token. The investors buy up the protocol’s token and use the voting power it confers to push through a proposal to liquidate the DAO, allowing them to profit.

NFT exchange

Sudoswap allows users to buy and sell NFTs instantly from liquidity pools — like decentralised exchange Uniswap — rather than relying on peer-to-peer order books, like OpenSea.

The project launched in July 2022 and introduced the SUDO governance token in early 2023 through an airdrop to early users and liquidity providers.

The protocol found some success, generating almost $5 million in fees over its lifetime, according to DefiLlama data.

However, as interest in NFTs plummeted throughout 2023 and 2024, so too did interest in Sudoswap. Use of the protocol dried up, and the SUDO token plummeted in value.

In addition to distributing Sudoswap fees, the proposal will also prevent users from minting more SUDO tokens by transferring ownership of its smart contracts to the burn address. This, statelayer said, will remove the risk of a potential governance attack.

The vote to distribute the Sudoswap fees will begin on March 28. Token holders have three days to cast their votes.

Sudoswap founder Owen Shen, who goes by 0xmons online, did not immediately respond to a request for comment.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at [email protected].