Venture DAOs

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Today we will be diving into the foundational segment of Venture DAOs. These DAOs have distributed governance, with all funds and assets controlled on-chain via smart contracts. There is no board of directors, and the organization has no central control. They manage the soft human-facing layer of crypto, which includes money, social capital, reputation, and attention. They are essentially economic tools which offer individuals power based on popular consensus and experience.

Popular Venture DAOs:

1. BitDAO

  • 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:
    - Pledged contributions from Bybit
    - Specialized Autonomous Entities (such as Game7 in collaboration with Forte, zkDAO in collaboration with Matter Labs, EduDAO in collaboration with student groups)
    - R&D labs
    - Token swaps and venture deals
    - 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:
    - Token swaps with existing and emerging projects.
    - Treasury allocation into various projects or autonomous entities (in the form of funding, liquidity support, and grants).
    - Updates to BitDAO’s core protocols (including governance and treasury management functions).
    - In Phase 1 BitDAO will utilize the industry standard setup of Gnosis Safe, Gnosis Snapshot off-chain governance, and multi-sig administrators.
    - 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.

2. MetaCartel Ventures

  • MetaCartel Ventures (Venture DAO) is a for-profit DAO created by the MetaCartel community for the purposes of making investments into early-stage Decentralized Applications (DApps).
  • A distributed autonomous organization (DAO) is a cryptonative and remote-first way for people to coordinate funding, labor, time and social capital. The governance of DAOs are distributed, with all funds and assets managed on-chain via smart contracts. There’s no board of directors, nor is there central control of the organization. They coordinate components of the soft human-facing layer of crypto: money, social capital, reputation and attention. They give power to individuals upon crowd consensus, and are inherently a political tool.
    - Check sizes will initially look to be in the $20k to $100k USD range, and will increase over time as the DAO’s AUM grows.
    - Includes core members from Moloch DAO, AAVE, MakerDAO, Compound Finance, Axie Infinity, Gnosis, CoinGecko & Uber.

3. The LAO

  • Founded in the same spirit as “The DAO”, as a member-directed venture capital fund based in the United States, with the goal of adhering to US law. The LAO, like The DAO, allows its members to pool cash, engage in initiatives, and share in the profits. The LAO is a legal corporation (a Delaware limited liability company) that is mostly managed through an internet application (a “DApp”) using smart contracts.
  • The LAO has funded over 30 projects across the Ethereum and blockchain ecosystem since its launch in late April 2020.
  • Unlike The DAO, which was arguably an implicit partnership with little legal protection for members, The LAO’s operating agreement clearly limits members’ responsibility and any fiduciary obligations among members, to the degree authorized by applicable law in each situation.
  • The LAO will rely on a service provider (initially, OpenLaw) to handle a variety of administrative functions on behalf of its members, such as preparing and sending annual K-1 tax forms, updating and maintaining the DApp, validating information related to projects chosen for investment, and handling other interactions that may arise during the LAO’s lifetime (e.g., receiving the proceeds from the sale of securities in fiat and converting them to a digital asset for distribution to members).

4. Stacker Ventures

  • A community-run blockchain technology for launching and managing pooled capital. Stacker Ventures is a decentralized autonomous organization (DAO) that creates decentralized funds, accelerates venture fund portfolio investments through an engaged community, and provides fund administration with checks and balances.
  • The DAO’s first venture fund is a fast-track crypto-native fund that invests in promising startups. In addition to the venture fund, the DAO manages a series of Active Yield Funds that employ DeFi exposure to generate competitive, investment-grade APY. Stacker Ventures is a global community of investors, builders, and early adopters who have come together to fund and support emerging blockchain technologies.
  • For early-stage investing, Stacker Ventures provides a flexible and decentralized architecture. Unlike other venture DAOs like Metacartel Ventures and The LAO, Stacker Ventures is an open protocol, a corporation without legal status as a corporation.

5. MolochDAO

  • A Decentralized Autonomous Organization, deployed on Ethereum mainnet. Members contribute capital with the sole intention of giving it all away to fund Ethereum infrastructure as an essential digital public good.
  • MolochDAO has $1M+ to dispense every year. As a grant giving DAO, their sole purpose is to fund projects that make an impact to the Ethereum ecosystem. If you are contributing knowledge via research reports or building tools in service of the public good, we want to hear from you.
  • FUNDS:
    - Individuals and projects dedicated to the advancement of Ethereum blockchain.
    - Initiatives to improve Ethereum infrastructure.
    - Culture building projects that iterate upon the lore of a global scale, cryptographically secured, parallel computational network as the digital public good that will facilitate the preservation of physical public goods.
  • Funded Projects Include:
    - MetaMoloch, True Blocks, and ETH 2.0 Validator Client to name a few.
  • Provides Research Grants

6. DAO5 ($125 million venture fund)

  • An experimental cryptocurrency investment fund that will convert into a decentralized autonomous organization (“DAO”).
  • The fund will invest in seed and pre-seed stage companies and projects across a variety of verticals in the crypto industry, including Layer 1 blockchain infrastructure, which supports networks such as Ethereum and Solana, privacy tech, decentralized finance, DAOs themselves, gaming, and NFTs. The average investment will fall between $500,000 and $2 million.
  • The goal of DAO5 is to empower our portfolio founders to manage a new treasury of assets which backstops the value of the DAO5 token. What happens after that will be determined by DAO5 tokenholder governance. They anticipate that DAO5 will not operate with a pre-defined mandate; but rather will be constantly evolving and adapting to the needs of the frontier decentralized economy.
  • DAO5 embodies the following five core values:
    - Incentive alignment, Meritocracy, Anon-Friendly, “Dunbar’s Number”, and Contrarianism.
  • Includes Advisors From:
    - Ava Labs, Polychain, Moonpay, Coinshares, and Yale.

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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