DAO Governance Under Scrutiny as Jupiter and Across Protocol Face Headwinds

The world of decentralized autonomous organizations (DAOs) is facing a significant stress test, with two prominent protocols, Jupiter (JUP) and Across Protocol (ACX), highlighting the inherent challenges of community-led governance. Solana-based decentralized exchange (DEX) Jupiter has taken the drastic step of pausing all DAO votes until 2026, citing a fundamental breakdown in trust and operational efficiency. Simultaneously, Across Protocol's ACX token plunged after allegations of governance manipulation and insider activity surfaced, rattling investor confidence. These events underscore a critical period for DeFi, where the theoretical ideals of decentralization are clashing with the practical realities of execution, creating significant volatility and trading opportunities for vigilant market participants.

Jupiter's Strategic Pause: A Necessary Reboot for JUP?

Jupiter's leadership has opted for a hard reset on its governance model. According to a statement from Jupiter executive Kash Dhanda, the protocol is navigating a "critical period," and the current DAO structure is simply not "working as intended." Dhanda pointed to a "breakdown in trust" and a "perpetual FUD cycle that grows with every vote" as key reasons for the pause. This move is aimed at preventing internal divisions from hindering the project's ability to innovate during a crucial window for DeFi's future. The decision is not without precedent; Yuga Labs recently proposed a similar move to scrap its ApeCoin DAO due to inefficiencies, suggesting a broader industry trend of re-evaluating complex governance systems. For JUP token holders, active staking rewards will continue at a rate of 50 million JUP per quarter, but the creation of new DAO-funded work groups will cease, halting further token emissions from that channel. This has left some investors questioning the token's utility in 2025, to which Dhanda offered a cryptic "stay tuned," hinting at future developments.

JUP and SOL Price Action: A Tale of Two Tokens

From a trading perspective, the market's reaction to Jupiter's announcement has been relatively muted, suggesting the decision may be viewed as a prudent, long-term strategic move rather than a sign of crisis. While the JUP token has shed 21.8% of its value over the last 30 days amid a sluggish broader market, it held steady around the $0.40 mark following the news. This indicates that the persistent governance issues may have already been priced in. In contrast, the native token of its underlying blockchain, Solana (SOL), has shown resilience. The SOLUSDT pair was trading at $152.37, marking a 24-hour gain of 1.688% on volume of over 1,300 USDT. Similarly, the SOLUSD pair stood at $152.79, up 1.704%. The divergence suggests that traders are currently isolating Jupiter's governance challenges from the health of the wider Solana ecosystem, treating it as a protocol-specific issue rather than a systemic risk.

Across Protocol's ACX Token Plummets on Manipulation Claims

While Jupiter's issues stem from structural inefficiency, Across Protocol is grappling with more severe allegations of impropriety. The protocol's ACX token tumbled by 10% following accusations on social media that core contributors may have front-run a major exchange listing and continue to exert undue control over the supposedly decentralized DAO. The sharp price drop was accompanied by a significant spike in trading volume, signaling a swift and decisive reaction from traders liquidating their positions amid the uncertainty. Across Protocol co-founder Hart Lambur vehemently denied the claims, stating they are "categorically untrue." Lambur clarified that the development team, Risk Labs, received ACX token grants from the DAO for protocol development, including the successful launch of Across v3 and the upcoming v4. He asserted this is a standard, transparent practice and that the tokens are being used exactly as intended to fund growth and hire talent under a four-year vesting schedule. Despite the strong denial, the incident serves as a stark reminder for traders of the reputational risk and sentiment-driven volatility inherent in the DeFi space.

Market Implications and Ethereum's Steady Course

These governance crises highlight a specific risk vector for DeFi investors that goes beyond typical market analysis. The integrity of a protocol's DAO is becoming a crucial factor in its long-term viability. However, the broader market appears to be compartmentalizing these events. Ethereum (ETH), the bedrock of the DeFi ecosystem, has continued its steady trajectory. The ETHUSDT pair climbed 2.57% to $2612.81, while the ETHUSD pair saw a 3.16% increase to $2633.68. The SOLETH pair also gained 2.59%, trading at 0.06800000. This resilience suggests that seasoned traders view the issues at Jupiter and Across Protocol as isolated growing pains rather than a contagious threat to the entire DeFi sector. For now, the market seems capable of distinguishing between protocol-specific governance failures and systemic risk, but traders must remain hyper-aware that sentiment can shift rapidly, especially when fueled by social media narratives.