Tally, the DAO governance platform, has "taken its final bow": a sudden shift in regulatory direction, the "Infinite Garden" dream shattered, and the winter of DAO governance has arrived?

Written by Glendon, Techub News

As global market attention gradually shifts away from cryptocurrencies, another key area of ​​the crypto industry has undergone a major change.

Last night, a piece of news that shook the DAO governance field came: Tally, a platform that provides core governance infrastructure such as on-chain voting and delegation for more than 500 leading DAOs such as Uniswap, Arbitrum, and ENS, announced that it will officially shut down after nearly six years of operation.

Surprisingly, in early February, Tally announced its intention to launch an ICO, planning to publicly document the entire process over the next 60 days and building an ICO fundraising platform based on the Uniswap CCA mechanism to help teams of different sizes raise capital. However, in just one month, from preparing to "set sail" to "crashing," Tally's sudden change of decision caught everyone off guard. What happened behind the scenes that caused Tally to change its mind so quickly?

In his open letter, Tally CEO Dennison Bertram revealed the immediate reason for Tally's demise. This reason also reflects the deep-seated dilemmas facing the current DAO governance landscape. (Related reading: List of crypto projects shutting down, transforming, or going bankrupt in 2026 )

A Brief History of Tally's Development

Before analyzing the reasons for Tally's demise, let's quickly review Tally's development history.

Founded by Dennison Bertram (CEO) and Rafael Solari (CTO), Tally is a leading platform providing on-chain governance infrastructure for decentralized autonomous organizations (DAOs). Its core mission is to lower the barriers to entry for DAOs and improve governance efficiency and transparency.

Starting in 2021, Tally gradually became a mainstream DAO governance tool, known in the community as the "DAO governance dashboard," providing users with intuitive and convenient on-chain voting, proposal creation, delegation management, and vault monitoring functions. Subsequently, Tally continued to expand its business boundaries, gradually developing into a full-cycle on-chain organizational operating system covering token issuance, fundraising, scaling, and staking incentives. Its platform serves over 500 well-known DAOs, including Arbitrum, Optimism, ENS, Uniswap, AAVE, ZKsync, and Wormhole, and has become one of the most widely used governance tool stacks in the Web3 world.

Looking back at the development of Tally, there are several key milestones that cannot be ignored:

2021-2022: Tally's platform influence expanded, raising $7.5 million through two rounds of funding. During this period, it was referred to by the community as the "DAO governance dashboard," supporting on-chain voting and delegation functions;

September 2023: Tally launched the zkSync Era mainnet, allowing protocols, projects, and public goods on zkSync Era to create and run DAOs, expanding support for the zero-knowledge proof ecosystem;

April 2024: Tally, together with Wormhole and ScopeLift, established MultiGov, a multi-chain governance system that supports DAO usage on Solana, the Ethereum mainnet, and EVM L2, breaking down barriers between different blockchains;

June 2024: Tally launched the Tally Protocol, providing an innovative solution for the economic governance of DAOs by providing a liquidity layer for governance staking and restaking to unlock the economic potential of governance tokens and optimizing the allocation of voting rights to bring economic security back to the blockchain protocol.

April 2025: Tally completed an $8 million Series A funding round, led by Appworks and Blockchain Capital, with participation from BitGo and others, bringing its total funding to $15.5 million;

February 2026: Tally plans to conduct an ICO and build an ICO fundraising platform based on the Uniswap CCA mechanism.

As of this writing, Tally's official website metrics show that the platform has transferred over $1 billion in value and generated over 7,000 daily proposals and over 270,000 token withdrawal records. In her open letter, Dennison Bertra further emphasized that throughout the company's lifecycle, the systems it helped operate protected protocols worth over $80 billion, over one million users accessed the site, and tens of millions of token holder addresses participated in governance through the platform.

Based on the data above, Dennison Bertra believes that Tally has proven that decentralized governance can operate at scale. The puzzling question is, if that's the case, why did Tally cease operations?

The dream of "Infinite Garden" has been shattered, and its business model is no longer sustainable.

In his open letter, Dennison Bertra succinctly summarized the direct reason for Tally's cessation of operations as follows: There are currently no decentralized protocol governance tool companies backed by venture capital firms, and the product-market fit points in the crypto industry are mainly concentrated in the payment and speculation fields.

Behind this situation lies the real dilemma encountered by the DAO industry, namely the failure of the "Ethereum Infinite Garden" hypothesis.

Once upon a time, the crypto industry optimistically believed that the Ethereum ecosystem would give birth to countless innovative DAO projects, including thousands of decentralized protocols, millions of active participants, and a robust governance system operating at scale, thus forming a vibrant "infinite garden" (a diverse ecosystem of protocols and communities that requires complex coordination and governance infrastructure). However, in reality, industry resources have increasingly concentrated in a few leading protocols, creating a Matthew effect where the strong get stronger. Leading DAOs like Uniswap, Aave, and Arbitrum account for the vast majority of governance needs, while smaller DAOs, due to limited funding and insufficient motivation, have extremely weak demand for professional governance tools.

In short, the crypto market is far from mature. Industry players initially envisioned building a rich ecosystem comprised of consumer applications, protocol communities, and governance organizations, but this vision has not materialized. Under these circumstances, Tally has been unable to develop a viable business model around this concept, making its development extremely difficult.

Meanwhile, it's alarming that Tally and the entire crypto industry are mired in a talent drain amidst the current complex and challenging situation. In recent years, the explosive growth of the artificial intelligence industry has attracted a large number of top technical talents. In contrast, the crypto industry is facing an increasingly serious talent shortage. It's important to understand that the crypto industry needs to continuously invest significant human resources in product development and technological iteration to meet ever-changing market demands. However, lured by the high salaries in the AI ​​industry, many core technical talents have switched careers, severely impacting the crypto industry's innovation capabilities and business models.

Dennison Bertra went even further, stating, "AI has become the new narrative of the future, and its narrative scope is much grander and broader than that of cryptocurrency." Although he remains confident in the crypto industry, he no longer agrees with the notion that the industry is still in its early stages.

The regulatory landscape has shifted dramatically, transforming the need for governance from a "must-have" to an "optional" one.

In addition to the factors mentioned above, Dennison Bertram, in his CoinDesk report, also emphasized that Tally's rise and fall were closely linked to the dramatic fluctuations in US crypto regulatory policies. He stated that during Gary Gensler's tenure, the US Securities and Exchange Commission (SEC) became increasingly stringent in its assessment of the security attributes of crypto tokens. Many projects, in order to avoid legal risks, adopted decentralized architectures (DAOs) to reduce the risk of their tokens being considered securities. During this period, DAO governance tools became an indispensable necessity for projects to ensure compliance. Tally, with its stable on-chain voting system, delegated management functions, and deep integration with mainstream smart contracts such as OpenZeppelin Governor, quickly became an industry benchmark, attracting top protocols such as Uniswap and Arbitrum to join.

However, as the US government's regulatory attitude has gradually become more lenient, the compliance pressure on the crypto industry has significantly eased. For example, in its regulatory safe harbor filing for crypto assets released yesterday, the US SEC explicitly stated that four types of crypto assets are not securities: digital goods, digital collectibles, digital instruments, and payment stablecoins as defined under the GENIUS Act. The SEC also listed 16 examples of digital goods, including SOL, HBAR, LINK, and ADA, in its explanatory document, stating that these assets do not fall under the category of securities.

The liberalization of regulatory policies has led many projects to discover that decentralized governance is no longer a necessary means of circumventing regulations. Instead, it can become a burden on project development due to issues such as inefficient decision-making and high governance costs. This fundamental shift in demand has directly resulted in a significant reduction in the market space for governance tools like Tally. Many teams, in order to reduce costs, have chosen not to pay for governance tools, which has contributed to the "end" of Tally. Therefore, the cessation of Tally's operations seems inevitable.

What impact will the shutdown of Tally have on the DAO community?

Tally is scheduled to gradually cease operations starting at the end of the month. Its closure will undoubtedly have a profound and multifaceted impact on the DAO community, not only exposing the fragility of the current decentralized governance ecosystem but also accelerating the industry's reflection and restructuring process.

On the one hand, Tally provided core functions such as on-chain voting, proposal management, delegation systems, and vault monitoring for over 500 DAOs, serving as the "operating system" for the daily governance of leading protocols like Uniswap, Arbitrum, and ENS. Its sudden closure means these organizations face pressure to migrate their governance tools in the short term. While on-chain data is immutable and proposal records remain, the lack of a stable and user-friendly front-end interface significantly raises the barrier to entry for ordinary members, potentially leading to a further decline in voting participation and exacerbating the problem of "governance apathy."

It's important to understand that DAO governance already suffers from low participation, slow decision-making, and a few active voters controlling a system worth billions of dollars. After the Tally shut down, some DAOs will need to urgently find alternatives or rebuild processes, a process that will inevitably increase operating costs and the probability of errors, leading to "short-term pain."

On the other hand, this event may raise questions within the community about the sustainability of DAO governance tools. The demise of Tally, an industry benchmark, sends a strong signal to the entire Web3 community: even the most successful infrastructure projects can become unsustainable due to changes in the external environment. This shakes the DAO community's trust in third-party governance tools. At the same time, Tally's shutdown also reveals the fundamental dilemma of DAO governance tools in terms of business models. Despite serving hundreds of protocols, Tally failed to find a sustainable path to profitability.

However, in the long run, crises often breed opportunities. While the closure of Tally has cast a shadow over the DAO governance industry, it doesn't signify the end of DAO governance. This event may become a catalyst for the DAO community to accelerate technological autonomy and ecosystem restructuring. It may prompt the community to place greater emphasis on decentralized deployment of the governance front end, or the industry to begin exploring new forms of governance tools. For example, AI-powered governance assistants are emerging, capable of automatically summarizing proposals, analyzing voting trends, and reminding users of key deadlines, thereby lowering the barrier to participation for voters.

Furthermore, changes in the regulatory environment may also bring new hope to DAO governance. If regulators can introduce a clearer and more reasonable regulatory framework for cryptocurrencies in the future, clarifying the legal status and governance boundaries of DAOs, it will help eliminate market uncertainty and promote the healthy development of the DAO industry. At that time, DAO governance tools may also usher in new development opportunities.

Conclusion

The rise and fall of Tally reflects the complete cycle of DAO governance, from its initial hype to its eventual cooling down. Its "farewell" also marks a significant milestone in the development of the DAO governance industry. It exposes the multiple challenges the industry faces in terms of regulation, market, and talent, and prompts deeper reflection on the future of DAO governance.

Perhaps Tally's departure is not the end, but rather the starting point for DAO governance to evolve into a more mature stage. In this era full of uncertainties, only by continuously innovating and adapting to change can we find new light in the midst of winter and propel DAO governance towards a more mature future.