Introduction to DAOSquare Incubator: Three DAO modes

24-03-01 15:26

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Original Title: "DAOSquare Incubator Introduction: Three DAO Models"

Original Source: Dao Square

Why Venture DAO?

In real life, there are various organizational and investment forms for collective investment where multiple people come together. As we previously discussed in the "Introduction to Venture Capital Series," individual investors have multiple options to participate in venture capital, such as investing directly as an individual investor, joining organizations in the venture capital field for collective investment, or investing through purchasing financial products issued by venture capital organizations.

Compared to the traditional finance industry, there are more Investment Communities in the Crypto space. Some of them are formed by one or several individuals who are good at venture capital, while others are a group of like-minded people who gather based on the concept of decentralized venture capital.

is a typical Decentralized Autonomous Organization (DAO) that is based on blockchain technology and operates on-chain collaboration. It can help communities or organizations establish a more trustworthy and secure fund operation and management system, which is deployed on the chain. At the same time, it can also realize a democratized investment operation mechanism. Compared with Investment Community, Investment DAO usually uses blockchain technology to raise and manage funds, and empowers different participants (investors, managers) through executable code programs (smart contracts), and then makes automatic investment decisions and investment management through it.

Why We Desgin DAO Modes?

One obvious trend is that many investment communities or funds have begun to pay attention to and embrace this emerging technology stack and development direction. However, they face the reality that the threshold for initiating and participating in Investment DAOs is higher, mainly due to technical barriers. DAOSquare is a solution provider focused on this field, and we are committed to making it easier for traditional venture capital funds and investors to use this emerging tool and leverage its advantages.

In DAOSquare Incubator, we have designed three modes of Venture DAOs based on the common operating models of investment organizations in the Crypto field. This modular approach to establishing and operating DAOs greatly reduces the barriers to entry and increases fundraising and investment efficiency. With the template-based approach, each DAO can be customized to meet the specific operational needs through parameter settings and changes. In DAOSquare Incubator, we strive to streamline the process of creating and operating Venture DAOs.

· The Summoner of DAO (creator) only needs to click a few times to deploy a lightly customized Venture DAO on the blockchain within a few minutes.

· Each DAO's Governor can manage and make decisions for the DAO by quickly initiating proposal voting.

· Investors can browse multiple Venture DAOs with relatively standardized forms on one platform, and flexibly join different modes of Venture DAOs according to their own needs to participate in investment.

· The operation of Venture DAO is based on smart contracts, and all activities can be checked and verified. Compared to offline investment organizations, it is faster, safer, and more transparent.

· For organizers and managers of DAOs, this emerging technology application can save them a lot of manual dirty work.

The Mode defined in the DAOSquare incubator determines the operational framework of a Venture DAO in the DAOSquare Incubator, and it determines how the DAO operates and the structure of smart contracts. The smart contract structure of Venture DAOs in different modes is not exactly the same, so once a DAO is deployed, its mode cannot be changed.

Currently, DAOSquare Incubator offers three types of Venture DAO models for users to create or participate in:

· Vintage

· Collective

· Flex

These three modes cover the current typical private collective investment management and operation mechanisms. Now let's introduce the three Venture DAO modes currently provided by DAOSquare Incubator in detail.

Vintage DAO

Design Concept

Vintage mode Venture DAO, abbreviated as Vintage DAO, is designed with reference to the blind pool fund of the GP+LP mode of traditional private equity funds. In situations where the investment target is uncertain, the fund manager and the investor put their funds into a fund pool, and the fund manager represents the investors to carry out investment activities. In Vintage DAO, there are two types of roles: Governor and Investor, which are similar to the functions of GP and LP in traditional funds, and there is a trustee relationship between them.

Role

Members of the Governor role assume a role similar to that of a fund manager, establishing funds, screening investment targets, conducting due diligence, and making decisions. Members of the Investor role only act as investors, injecting funds into the Fund initiated by the Governor in Vintage DAO, entrusting the Governor to make investments. Investors do not directly interfere with the investment decisions of the DAO.

Governance of DAO and decision-making and management of specific investment projects by the Governor will be completed through proposal submission and voting. Investors in Vintage DAO do not have voting rights. The Governor may receive management fees and Carry as compensation and incentives. For each investment project source provider (Proposer), the Governor can set rewards such as investment amount or (and) Payback Token.

Operation Process

After a Vintage DAO is successfully deployed, the Governor can launch a new fund. Eligible investors can make deposits during the fundraising period. If the fundraising goal is met at the end of the period, the new fund will be officially established and enter the investment phase.

Vintage DAO can freely set the relevant mechanisms and time ranges for all stages (fundraising period, investment period, redemption period, refund period) within a fund, and run automatically. Currently, only one active fund can exist in a Vintage DAO at the same time. After a fund ends, the DAO can quickly launch the next fund, whether it is the same or different.

The investors and share ratios of the investment project are locked at the beginning of each investment period. Only when the amount of funds in the DAO is sufficient to complete the investment execution, can the submission of investment proposals be allowed (contract restrictions).

适宜人群

translates to

Applicable Population

Vintage DAO provides an operational framework that is similar to traditional private equity funds. The target audience includes but is not limited to:

· Traditional private equity funds are transitioning or practicing in the Web3 field.

· Professional investors can establish their own Venture DAO to leverage their investment expertise.

· An investment organization with a certain project reserve but lacking funds.