Mango DAO, a decentralized finance protocol, stirred controversy with its decision to use treasury funds for a token buyback program, sparking accusations of 'self-dealing' within the community.

The plan, initiated on April 7, aimed to repurchase tokens at a premium to market price, drawing skepticism from some members who alleged that the move was orchestrated to benefit a buyer connected to the FTX estate. Concerns were raised after MNGO tokens were transferred from FTX to an anonymous account shortly before the proposal surfaced, suggesting a potential over-the-counter deal.

Critics, including some community members, pointed fingers at DonDuala, the proposal's originator, suspecting ties to the FTX buyer. However, DonDuala remained silent on the matter. Despite the controversy, proponents defended the buyback, arguing it would benefit investors by correcting the token's underpriced market value. An amended version of the proposal was eventually approved on April 24.

Mango Markets operates as a Web3 app on the Solana network, governed by MNGO tokenholders constituting the Mango DAO. The protocol suffered a $116 million exploit in October 2022, resulting in a significant drop in token price.

The Initial Proposal and Community Backlash

DonDuala's proposal suggested a buyback of 275 million MNGO tokens, offering Dai stablecoin derivative CHAI to holders in exchange. However, suspicions arose when it was discovered that a mysterious account, allegedly linked to the FTX estate, was actively participating in the vote to support the buyback.

Some community members accused DonDuala and another DAO member of involvement with the FTX-related account, labeling the situation as a 'backdoor deal.' DonDuala evaded direct response to these accusations, instead focusing on defending the proposal's merits.

Despite the initial proposal's rejection, DonDuala submitted a revised version, scaling down the buyback to 156 million MNGO tokens. This sparked further controversy, with Mango Markets co-founder Daffy Durairaj condemning DonDuala and Maximilian for engaging in 'untrustworthy behavior' and 'self-dealing.'

The Final Vote and Buyback Execution

After contentious debates, the revised proposal passed on April 24, resulting in the buyback of approximately 73 million MNGO tokens. DonDuala announced plans for another buyback proposal in May, aiming to use a portion of the DAO's treasury for further token repurchases.

While some community members voiced concerns about the buyback's legitimacy, others defended it, asserting the importance of aligning token price with book value. The controversy surrounding Mango Markets comes amid ongoing legal challenges, including Avrham Eisenberg's fraud conviction related to the platform's exploit, alongside charges of possession of child pornography.