Tezos Developers Walk Away, Plan ‘Dune’ Hard Fork

A segment of developers plan to conduct a hard fork from the main Tezos blockchain and create a cryptocurrency called “Dune.”

Dune: Hard Fork Planned

A fork of Tezos is being planned, called “Dune.” Tezos Executive Director Shaun Belcher has called it comparable to an exit scam. It is led by investment firm Starchain Capital, which may be trying to recoup its losses. Belcher has provided email evidence, in case anybody was second-guessing the accusation:

“Projection: Low: day1, the fork captures 5% of the current Tezos market cap, which lead us to a +$50m valuation (liquidity event) Middle: day1, the fork captures 20% of the current Tezos market cap, which lead us to a +$200m valuation (liquidity event) Good: day1, the fork captures 40% of the current Tezos market cap, which lead us to a +$400m valuation (liquidity event)”

Another party involved in the hard fork is OCamlPro, which was responsible for creating multiple Tezos-related projects, like its block explorer. However, a dispute emerged after OCamlPro failed to open-source its project — a requirement for grant funding from the Tezos Foundation. The hard fork, backed by Starchain Capital and OCamlPro, is scheduled for September 2019.

Not the First Controversy for Tezos

Tezos was one of the most-hyped initial coin offerings (ICOs) of 2017. With over $232M raised, the project raised ten times more than it anticipated. Yet, in 2018, investors filed four class action lawsuits. In an effort to skirt regulations, the Tezos Foundation has tried to characterize much of its largest investors as “donors.” Back in April 2018, cryptocurrency writer Thijs Maas wrote a groundbreaking synopsis of the scandals happening behind-the-scenes. The Foundation was not only facing an internal ‘coup’ from its board members but is also being legally squeezed. Arthur and Kathleen Breitman first set up the Tezos Foundation in 2017 in Switzerland, but are not officially part of it. Instead, they run their own company incorporated in Delaware, called Dynamic Ledger Solution, Inc. (DLS). Many accuse the Breitmans of doing this to avoid being liable for the Tezos ICO.

The Market Responds

In May 2017, Tezos’ co-founder — who has been sanctioned by FINRA — said that “there will almost certainly be hard-forks in the life of Tezos.” Dune will be Tezos’ first one and the market has overall responded negatively. Tezos has dropped some 35 percent since mid-May amid the controversy, with many investors hoping for a way out. Do you believe Tezos will survive this controversy? Let us know your thoughts below.