This document was published in response to allegations made by a former team member, Aaron, on November 30th, 2022.

THE CURRENT SITUATION

• All Rug Radio wallets and sponsorship wallets are, and have always been, public and transparent:

  • DAO Wallet: 0x28D5351915Cf2638e562b19E1EE75f93D5aF3aDf

  • Mint Safe: 0xCc5e2F72E00BE95c276eE0983886b5e4f8A6FB12

  • GM Web3: 0x8D0a25318962bf33f04fAAEAEdca217A40600067, 0xddE703178af2ae65EFabcF0eFD7f01cad6CA498b

• Since the setup and vote approving the DAO framework, hosts are required to give 15% of sponsorship back to the DAO and they can keep 85%.

• For the GM Web3 show Farokh, Mando, OSF have chosen voluntarily to put their 85% personal sponsorship payments back into the ecosystem via the buyback of Rug Radio NFTs. This has led to nearly 250ETH in total sponsorship being used to fully support the ecosystem.

• Rug Radio continues to host the biggest guests across NFTs, crypto and web3. We have shows which support many different sub-communities and causes.

• Guests who come on to speak about an upcoming mint are asked for sponsorship to support the ecosystem and all sponsors are disclosed.

• All sponsors are vetted by a team of 5 people including hosts.

• Hosts are individuals with various financial and non-financial holdings and like anyone else, they may participate in active trading.

• No business, DAO or organization begins perfectly. There was no DAO framework (nor DAO often) during the time which relates to almost all of these allegations against Rug Radio. That being said, we believe we acted appropriately in all instances.

THE ALLEGATIONS

PAID SPACES

• Cheech & Chong

  • Farokh did host Cheech & Chong on January 23rd. He was paid 7.3ETH to provide marketing advisory work for the project which ended up including hosting a space.

  • This space was hosted before Rug Radio had organized the DAO or a DAO framework. The initial agreement around the advisory work was also before Rug Radio mint.

  • Cheech & Chong are well-known figures whose art and culture suited the space; their entry into NFTs was newsworthy.

  • This was an art project and no financial advice was given during the space

  • Despite this, all funds paid to Farokh were then used to buy Rug Radio Genesis NFT. In fact his actions replicated the framework of the current buyback program.

SPACES WITH RELATED AFFILIATIONS

• Origin Protocol

  • Farokh hosted Paris Hilton regarding her drop with Superplastic on the Origin Protocol NFT platform on February 6th. He was not paid to host this space.

  • The space was hosted because Paris Hilton is a well-known figure, had been involved with NFTs for a long period and the drop was newsworthy.

  • Farokh has a long-standing advisory agreement for tokens with Origin Protocol in which OGN token was released to him monthly for 2 years. This agreement occurred in early 2021, well before the Paris Hilton space was hosted.

  • Origin Protocol never asked for Farokh to host nor connected him to Paris in any way

• FewoWorld

  • Farokh has hosted Fewocious several times over the course of 2022.

  • Fewocious is one the most well-known and celebrated artists in NFTs.

  • As stated on the website and various other places, Farokh works with FewoWorld as their “Chief Vibes Officer ''. It is mentioned during every space he hosts with him.

SPACES WITH NO RELATED AFFILIATIONS

• LIT

  • Farokh did host Kim Basinger & Frank Marshall on their drop related to the LIT ecosystem on February 2nd. He was not paid to host this space.

  • The space was hosted because Kim Basinger & Frank Marshall are notable figures, LIT was also a significant project that captured the attention of the space and was newsworthy.

  • Farokh & Rug Radio were not involved in the creation of LIT. Many well-known personalities bought or were gifted the LIT ERC20 coins - Farokh was one of those many people who bought.

  • At the time when Farokh hosted the space with Kim Basinger & Frank Marshall (February 2nd), Farokh had no investment in LIT tokens.

• Drift

  • Farokh did host Drift multiple times over the course of 2022. He was never paid to host spaces.

  • The 6ETH transfer from Drift to Farokh was not related to hosting in any way. Instead, it was a swap payment related to a trade between two ‘Where My Vans Go’ NFTs between the two parties.

  • Two additional & accidental 6ETH payments were made to Farokh by Drift at the same time of this trade which were immediately returned.

• FriendsWithYou

  • Farokh did host FriendsWithYou on March 7th. He was not paid to host this space.

  • The space was hosted because FriendsWithYou are well-known figures in the space and their new project was newsworthy.

  • Farokh owned an NFT from a previous collection by FriendsWithYou at the time he hosted. This was stated during the spaces. He had no investment or equity ties to the success of the drop.

USE OF FUNDS & MARKETING

• At no time during the initial marketing of Rug Radio was it marketed as a security or investment product.

• Acknowledging Rug NFTs yield $RUG token simply states the verb of accrual for our utility token, it does not imply it is a security or investment product.

• As stated correctly in the recording cited, Mel and Farokh were not paid salaries at that time. Mel has never been paid a salary. Farokh’s salary began September 1st after the DAO Framework was established and the budget was approved by the DAO.

• The Rug Radio launch team was transparent about how the funds would be deployed, including the distribution of a portion of funds to team compensation, operations and DAO treasury.

• Aaron was also a paid participant in the set up of Rug Radio. After launch, his arrangement was terminated with cause.

THE FUTURE

• Going forward, for the avoidance of any doubt or potential misrepresentation we will have a disclaimer under each space stating that hosts may own some assets (including NFTs) which are linked to guests that come on shows.

• Rug Radio & RugDAO take these allegations very seriously. Aaron was a former team member of Rug Radio who was asked to leave (with cause) and has now maliciously retaliated.

• Threats were made against our team in the lead-up to its publication. Several team members tried to reach out to understand the situation and were rebuffed.

• Many details in the document published by Aaron were purposefully misrepresented or omitted to cause harm to the project. Serious allegations were then made to slander and defame Rug Radio without proper evidence or research.

• He has also indicated he intends to continue to pursue a libelous course of action against Rug Radio and our team.

• The DAO and its members will be considering next steps with our legal counsel.

Together, we are creating the future of media. It is clear others (competitors, ex-contractors, etc.) may continually try to tear us down. It is important to question all motivations and examine all evidence before drawing conclusions.

We will continue to build day-in, day-out. We are proud of our achievements, and will continue to push the space forward.

Yours truly,

Rug Radio