Top 10 DAOs (AUM)

Hello Xillion.One community!

In this piece, we will be looking into the top 10 DAO projects with respect to Assets Under Management (AUM) in Q2 of 2022.

AUM is the sum of the market value for all of the investments held by a DAO in its treasury.

AUM is a popular metric within the investment industry, as well as in the decentralized digital asset space as a measure of the size/success of an investment management entity. The AUM of an entity is often compared with historical data to express the amount (or lack) of growth. It is also often compared with the AUM of competitors (with an increase in AUM pointing to evidence of positive performance).

Our methodology:

The way in which the Assets Under Management metric is broken down in the Digital Asset market is fundamentally similar to the approach seen in traditional finance. AUM is the total market value of the investments that a person or entity manages on behalf of clients. Assets under management definitions and formulas vary by company.

{AUM = NAV (Net Asset Value) x Total # of units issued}

It can refer to the total amount of assets managed for all clients, or it can refer to the total assets managed for a specific client. AUM includes the capital the manager can use to make transactions for one or all clients, usually on a discretionary basis. This depends on the flow of investor money in and out of a particular fund and as a result, can fluctuate daily.

Also, asset performance, capital appreciation, and reinvested dividends will all increase the AUM of a fund. Also, total firm assets under management can increase when new customers and their assets are acquired. Factors causing decreases in AUM include decreases in market value from investment performance losses, fund closures, and a decrease in investor flows.

Top 10 DAOs (Q2 AUM):

1. Uniswap ($2.3B)

  • The Uniswap Protocol is an open-source protocol for providing liquidity and trading ERC20 tokens on Ethereum. It eliminates trusted intermediaries and unnecessary forms of rent extraction, allowing for safe, accessible, and efficient exchange activity. The protocol is non-upgradable and designed to be censorship resistant.
  • Uniswap v3 is a noncustodial automated market maker implemented for the Ethereum Virtual Machine. In comparison to earlier versions of the protocol, Uniswap v3 provides increased capital efficiency and fine-tuned control to liquidity providers, improves the accuracy and convenience of the price oracle, and has a more flexible fee structure.
  • Swap, earn, vote, and more with hundreds of DeFi apps, integrations, and tools built on the Uniswap Protocol, which includes 300+ integrations (such as Trust Wallet, 1Inch, MetaMask, and Coinbase Wallet to name a few).
  • Components:
  1. Concentrated Liquidity: Liquidity providers (LPs) are given the ability to concentrate their liquidity by “bounding" it within an arbitrary price range.
  2. Flexible Fees: The swap fee is no longer locked at 0.30%. Rather, the fee tier for each pool (of which there can be multiple per asset pair) is set on initialization.
  3. Protocol Fee Governance: UNI governance has more flexibility in setting the fraction of swap fees collected by the protocol
  4. Liquidity Oracle: The contracts expose a time-weighted average liquidity oracle.

2. BitDAO ($2.2B)

  • BitDAO is a collective of builders and stakeholders enabling mutually beneficial Web3 ecosystems of people, products, and public goods. It is an open platform for proposals that are voted upon by BIT token holders, and is agnostic to chains and projects.
  • Over $638M allocated across AEs and labs.
  • Partners include Dragonfly Capital, Jump Capital, Alameda Research, Pantera, and Peter Thiel.
  • BitDAO aims to grow the treasury through liquid, short term, and long term opportunities including:
  1. Pledged contributions from Bybit
  2. Specialized Autonomous Entities (such as Game7 in collaboration with Forte, zkDAO in collaboration with Matter Labs, EduDAO in collaboration with student groups)
  3. R&D labs
  4. Token swaps and venture deals
  5. Yield strategies
  • BitDAO is owned and governed by BIT token holders. Their initial policy is for the following actions to be executed only after a successful proposal and vote:
  1. Token swaps with existing and emerging projects.
  2. Treasury allocation into various projects or autonomous entities (in the form of funding, liquidity support, and grants).
  3. Updates to BitDAO’s core protocols (including governance and treasury management functions).
  4. In Phase 1 BitDAO will utilize the industry standard setup of Gnosis Safe, Gnosis Snapshot off-chain governance, and multi-sig administrators.
  5. In Phase 2 BitDAO will look to build a custom governance module, most likely referencing on-chain upgradable solutions such as Compound Governor Bravo.
  • BitDAO Treasury will hold 30% of total BIT tokens.

3. Lido ($724M)

  • The Lido Ethereum Liquid Staking Protocol, built on Ethereum 2.0's Beacon chain, allows their users to earn staking rewards on the Beacon chain without locking Ether or maintaining staking infrastructure.
  • Unlike staked ether, the stETH token is free from the limitations associated with a lack of liquidity and can be transferred at any time. The stETH token balance corresponds to the amount of Beacon chain Ether that the holder could withdraw if state transitions were enabled right now in the Ethereum 2.0 network.
  • In the case of liquid staking, the competitors are well-known providers like centralized exchanges and other decentralized protocols like RocketPool. The DAO is the logical compromise between full centralization and decentralization, which allows the deployment of competitive products without full centralization and custody on the exchanges.
  • Unlike similar systems, Lido does not require node operators to deposit equal collateral of staking positions. Instead, Lido DAO-chosen node operators should have a track record with assets staking, which will be supplemented with slashing insurance. This approach will allow the system to be more capital-efficient.
  • Liquid staking provides a viable alternative to both self and exchange staking. Lido provides a balance of risk, reward, and сonvenience. It allows users to trade staked ether without a negative impact on the Ethereum network’s decentralized nature.
  • Lido is useful for both small and large ether holders. Small wallets could use staking without having to stake big chunks of their funds. Larger entities would be able to hedge their funds against ether volatility and use staking without having to maintain staking infrastructure.

4. UXD Protocol ($722m)

  • UXD is a decentralized stablecoin, backed 100% by delta neutral position. The funding rate of the delta-neutral position will be automatically distributed to the stakeholders of UXD protocol.
  • The protocol is decentralized and does not custody user assets. Users will not interact with any centralized entity, which ensures that everyone will be able to transact without censorship.
  • UXD is capital efficient, where users can issue 1 UXD with 1 USD worth of assets, without a requirement of over-collateralization.
  • Investors include: Almeda Research, Defiance Capital, Solana Foundation, and Mercurial Finance to name a few
  • Components:
  1. Interest Payments: Users of UXD will earn part of the interest generated from the funding rate when the funding rate is positive. By utilizing smart contracts, UXD holders' balance will increase by the amount of interest automatically.
  2. Insurance Fund: The insurance fund is set up so that the holders of UXD will not have to pay interest when the funding rate is negative. Besides the auction of UXP, there will be a constant positive flow of funds to the insurance fund when the funding rate is positive, since part of the funding rate will go to the insurance fund.
  3. Arbitrage: If the price of the stablecoins deviates from the price of fiat, arbitrageurs will step in to issue/redeem the stablecoins and make a risk free profit. This will peg the price of stablecoins.
  4. Verifiable: The amount of stable coins in circulation and the amount of bitcoin backing the stablecoins can be verified by checking the blockchain.

5. Mango DAO ($681M)

  • Mango intends to merge the liquidity and usability of CeFi with the permissionless innovation of DeFi at a lower cost to the end user than both currently provide. Towards this goal, Mango offers margin trading and perpetual futures along with decentralized governance to decide the future evolution.
  • The key ingredients for this vision are low latency, low transaction cost and full decentralization.
  • Components:
  1. No fees
  2. Cross margined
  3. Allows limit orders on margin
  4. Margin positions pay interest
  5. Pooled SRM for fee reductions
  • DAO tokens can only be unlocked via token holder governance. They propose that tokens be distributed roughly on a logarithmic supply model similar to Bitcoin but with a halving every two years (i.e. 50% of the tokens distributed in the first two years, 75% in the first four years, 87.5% in the first 6 years, etc.).
  • The Mango Token is a governance token, first and foremost. Collectively, the token holders have the power to upgrade the protocol as they see fit, only constrained by the checks-and-balances of the DAO. This allows token holders to create incentives to reward participation and drive usage of the protocol.

6. Aave ($395M)

  • Aave Grants DAO is a community-led grants program to fund ideas submitted by the Aave protocol’s community, with a focus on empowering a wider network of community developers.
  • AGD’s mission is to build a thriving ecosystem of contributors for Aave. They provide grants to projects, ideas, and events that benefit Aave and its ecosystem. Their hope is to be at the forefront of ecosystem development at Aave. Ensuring a constant influx of talented builders is critical to Aave’s growth.
  • Grants have been awarded to developers building to benefit the Aave ecosystem in a range of areas:
  1. Protecting users: Cono Finance by Gelato Network, Aave Liquidation Notifier by Steven Li
  2. Onboarding and attracting new users: Aave quests on Rabbithole, 2001 DeFi developing a mobile app for Aave, Blockchain Education Network enabling any student to participate in Aave governance
  3. Increasing liquidity: Symphony Finance’s yield generating limit orders, and Sacred Finance’s privacy preserving DeFi protocol
  4. Analyzing the protocol: A growth dashboard by Omni Analytics, community enabled analytics program by Flipside Crypto
  5. Improving oversight and transparency: Safeguard by Tally
  • Besides decentralizing Aave grants, they have also worked towards establishing a Developers DAO and Risk DAO, focused on protocol development and risk assessment of the protocol, respectively.
  • The Aave treasury focuses on ecosystem growth and earns fees from transactions, staking, and liquidations.

7. Compound Finance ($372M)

  • Compound is an algorithmic, autonomous interest rate protocol built for developers, to unlock a universe of open financial applications.
  • Compound is managed by a decentralized community of COMP token-holders and their delegates, who propose and vote on upgrades to the protocol.
  • In addition to being a standard ERC-20 asset, COMP allows the owner to delegate voting rights to the address of their choice; the owner’s wallet, another user, an application, or a DeFi expert. Anybody can participate in Compound governance by receiving delegation, without needing to own COMP. The token also includes code to query an address’ historical voting weight, which is useful for building complex voting systems.
  • Anybody with 1% of COMP delegated to their address can propose a governance action; these are simple or complex sets of actions, such as adding support for a new asset, changing an asset’s collateral factor, changing a market’s interest rate model, or changing any other parameter or variable of the protocol that the current administrator can modify.
  • All proposals are subject to a 3 day voting period, and any address with voting power can vote for or against the proposal. If a majority, and at least 400,000 votes are cast for the proposal, it is queued in the Timelock, and can be implemented after 2 days.
  • Developers building on top of Compound are encouraged to actively participate in governance, which will be tested in the open. As a failsafe, our team will have the ability to suspend the governance system (though not the protocol’s 2-day timelock) during the sandbox.

8. Radicle ($286M)

  • The Radicle project was established with two main objectives:
  1. Develop resilient collaboration infrastructure that respects users freedoms, without a reliance on trusted gatekeepers or on corporate/regional dictation.
  2. Use the newly developed sovereign financial infrastructure (Bitcoin, Ethereum, DeFi) in order to create new value flows for developers and grow the digital commons.
  • With over 1000 projects already published to the network and an average growth of 8% week-to-week in its public beta, the Radicle project is ready to decentralize the network among its community and begin the quest towards self-sustainability.
  • The Radicle governance module is a Compound fork and gives owners the right to participate in the governance of the Radicle smart contract system.
  • Anybody with 1% of RAD delegated to their address can propose a governance action. Proposals are executable code, not suggestions for a team or foundation to implement. All proposals are subject to a 3-day voting period, and any address with voting power can vote for or against the proposal
  • 100M Radicle tokens (fixed) have been minted at genesis and will be vested over the course of 4 years.

- 50% Community Treasury (vesting over 4 years)

- 19% Team (4 year vesting from join date, 1 year lock-up from genesis)

- 20% Early Supporters (1 year lock-up*)

- 5% Foundation (1 year lock-up)

- 2% Seeders Program (1 year lock-up*)

- ~4% Liquidity Bootstrapping Pool

9. SuperRare ($252M)

  • A pioneer in the NFT space, SuperRare has grown into the premier NFT art platform, with $200M+ of art collected and $5M+ in artist & collector royalties paid to date.
  • The SuperRare DAO is a multi-sig smart contract deployed on Ethereum (superraredao.eth).
  • $RARE token holders collectively govern the SuperRare DAO – a decentralized organization that will oversee key platform parameters, allocate funds from the Community Treasury, and effectuate proposals passed through community governance relating to improvements to the network and protocol.
  • A 7-person governance council controls the SuperRare DAO Community Treasury via a 4-of-7 multi-sig wallet ( CEO of SuperRare labs and Nick Tomaino, founder of 1Confirmation to name a few on the roster).
  • SuperRare Improvement Proposals (SIPs) are the means by which the community will present upgrades and distributions through $RARE governance. SIPs are created by token holders and shared on the SuperRare governance Forum.

10. Synthetix ($238M)

  • Synthetix is a new financial primitive enabling the creation of synthetic assets, offering unique derivatives and exposure to real-world assets on the blockchain.
  • Offers the benefits of DeFi with a fully on-chain permissionless futures trading experience.
  • Synthetic assets, or Synths, are assets voted into existence by the community and can come in the form of fiat currencies, cryptocurrencies, stocks, commodities and anything else with a price.
  • The Synthetix Protocol has several key governing bodies and artifacts which co-exist to enable the decentralized nature of the Protocol. The key decentralized autonomous organizations (DAOs) are the - Spartan Council, Protocol DAO, Synthetix DAO, Ambassadors DAO and the Grants DAO.
  • The Synthetix decentralized governance process utilizes these key artifacts - Synthetix Improvement Proposals (SIPs) and the Synthetix Configuration Change Proposals (SCCPs) which effectively outline proposed present, past and future changes to the Synthetix Protocol.
  • Components:
  1. Spartan Council (SC): The Spartan Council (SC) is a governing DAO which currently comprises 8 members who are elected (see Elections) for the duration of an epoch by community staking participants.
  2. Protocol DAO (pDAO): An organization which operates out of a Gnosis multi-signature wallet. The wallet is assigned as the owner of the Synthetix Protocol core contracts, which makes the pDAO responsible for upgrading and releasing new contracts on behalf of the Spartan Council.
  3. Synthetix DAO (sDAO): The Synthetix DAO is the DAO responsible for managing the Synthetix Protocol treasury, their only role is ensuring that the Synthetix governing bodies remain incentivised to support the Synthetix Ecosystem’s upkeep and future development.
  4. Ambassador DAO (aDAO): Ambassadors are nominated community members who are appointed as a signer on a Gnosis multisig, their role is to gather support from Synthetix community members who delegate their governance tokens (from other external protocols) to the multisig, effectively empowering the Ambassadors to participate in external protocols governance systems which have a positive impact on the Synthetix ecosystem (i.e interoperable protocol features, listing of synthetix synths on DEX’s).
  5. Grants DAO (gDAO): The grantsDAO is the organization that is responsible for vetting, issuing and accepting proposals to be funded. The proposals consist of public goods that community members want to be built that directly benefit the Synthetix ecosystem.

A truly decentralized organization provides the resources within its platform (or certain network effects) which can subject these given network effects to properly grow and provide for their DAOs. This commitment to fund regenerative infrastructure and digital public goods will eventually lay the foundation for physical public goods. Decentralized and open source voting helps to simultaneously power every member of the community to make a meaningful impact.

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