‘Doxxing’ allegations surrounding $35m Optimism grants spark DAO debate

The decentralised autonomous organisation governing the Optimism blockchain, also known as the Token House, is proposing to suspend a grant recipient based on allegations of intentional “doxxing.”

The practice of revealing someone’s private or identifying information without their consent is a big no-no in crypto.

In this case, the proposal targeting alleged doxxer Carlos Melgar and to be voted on by holders of the DAO’s governance token OP, has ignited debate over the extent to which decentralised entities should be involved in moderating online behaviour. It also covers what doxxing really amounts to.

“It would have been unethical and doxxing if I disclosed something that wasn’t already publicly shared by them or was shared with me in private,” Melgar told DL News.

Leading builders and participants in the industry value privacy, with many preferring pseudonymity — the use of an alias — to build and maintain an unencumbered digital presence. Pseudonymity also helps safeguard their identities against potential threats, both online and offline, given incidents of targeted scams and less commonly, violence.

Still, what constitutes doxxing continues to be a source of contention.

Doxxed or not doxxed?

The controversial proposal stems from a report filed by an anonymous community member who alleges that after they were nominated for a badge — the right to vote in an important grant allocation — in a public forum, Melgar questioned their nomination and exposed personally identifying information.

This, they claim, led to a violation of the Token House’s code of conduct, amounting to doxxing and harassment.

The badge-holder position enjoys the power to help allocate 30 million OP tokens — worth about $35 million — and is highly desired by those who want to steer the direction of grants.

‘They’ve even publicly disclosed the location of their honeymoon.’

—  Carlos Melgar

In a rebuttal to claims that he “exposed personal information that wasn’t public,” Melgar shared a tweet from the allegedly doxxed person, arguing that the information he referred to had long been public.

“They’ve even publicly disclosed the location of their honeymoon. I did not ‘doxx’ their names and referred to them with the aliases they use online,” he said. The public information has since been deleted.

Although there appears to be a consensus within the community that doxxing is reprehensible, many argue in the governance forum that the accusations against Melgar don’t align with the incident.

“I see no evidence of misconduct. It’s being withheld. I see links to deleted tweets and rebuttals… and drama again without evidence,” DAO contributor Lefteris Karapetsas said. “Thus, I can’t make an informed decision, so I will most probably vote no here.”

The debate is complicated by the proposal’s omission of the specifics of the alleged misconduct, as it aims not to perpetuate it.

“Can we see some evidence? How am I supposed to evaluate something so vague that looks like a he said, she said without proper context?,” pseudonymous contributor jamesbond007 said.

Doxxing and crypto

The debate over doxxing within Optimism’s governance structure is part of a wider trend across DAOs — the challenge of balancing DAO contributor privacy and accountability within novel, community-driven structures.

In the past, similar concerns have been raised in other leading DAOs. A notable instance was a proposal championed by Rune Christensen, the influential founder of MakerDAO.

Christensen pushed for enforcing strict anonymity within the organisation, arguing that it would offer better protection to MakerDAO members from potential threats posed by criminals and even hostile governments.

But doxxing in crypto can also be a lucrative endeavour.

Blockchain data provider Arkham launched a dox-to-earn programme called The Intel Exchange, designed to be an on-chain intelligence exchange that lets users “buy and sell information on the owner of any blockchain wallet address.”

So far, bounty hunters who tied pseudonymous wallets to specific individuals or entities have earned about $18,000.

Ultimately, the question of whether disclosing wallet-specific details — for money or not — amounts to a reprehensible form of doxxing just adds to the developing complexities of crypto’s ethics.