In times of rapid change, DAO is the next direction for the investment market

Do DAO responses have an impact on innovation in capital investment?

2022 will be the year of DAO.

The definition of DAO is a decentralized autonomous organization, a term for strong encryption, and often refers to a blockchain organization and administration, and is a new type of organization that deals with existing business organizations such as unions. Consider working in a DAO without a manager or supervisor.

Legal DAO is about to auction US Legal, and Sequoia wrote DAO briefly on her Twitter profile.

With the blessing of capital, the torrent of DAO will rush into the market. According to statistics from "New Chain", more than 40 DAO were created in 2021. In the second half of the year, especially in September, DAO formation was concentrated and venture capital claims gradually increased.

According to a report by blockchain research firm Messari, venture capitalist DAO (DAO) is one of only two new entities in this arena. More than a third of the DAOs listed in the report are venture capital DAOs, and Syndicate Protocol's Series A revenue has reached $ 20 million, making it the largest example of DAO funding in the world. year. .

It is Sequoia Capital that successfully supports the DAO strategy for large companies. Sequoia Capital has previously said its existing capital structure is stagnant and plans to restructure its capital. Is Venture DAO's response to disrupt innovation?

1,In a year of explosive growth, venture capital firms have faced challenges.

Recently, two big Silicon Valley cryptocurrency giants, Tesla CEO Elon Musk and former Twitter CEO Jack Dorsey, criticized Andreessen Horowitz (“Web3.0”) on Twitter A16Z.

Judging from the discussion on Twitter, Elon Musk and Jack Dorsey commented on the risky removal of Web 3.0. Because Web 3.0 is the next generation of the Internet and it doesn't have to be decentralized and centralized. The layout of the footbridge has been criticized by the public.

Sequoia Capital changed its Twitter statement in December to "Help the brave build a DAO legend," but Sequoia Capital has removed the above statement at a later date.

These conflicts are small aspects of Web 3.0 that undermine the fundamental concept of capital investment and also affects the risk of capital investment.

In the first quarter since 2021, the global financial services industry broke the $ 100 billion mark for the first time. According to a report by CB Insight, global investment, production and investment hit new highs in the quarter, and world trade in the quarter grew 105% (up 105% from $ 77 billion) compared to the same period last year. During the same period in 2022 ($ 158.2 billion), capital investment of over $ 100 million increased 136% from the previous year.

The growth of venture capital has reached unprecedented heights and the industry is facing new challenges.

The rapid expansion of venture capital funds is associated with 'cross-border' investments. Venture capital investment has been the best asset in the world for the past three years, according to data from The Economist, and has invested more in the private sector and public business justice over the past ten years. . “Frontier Transformation” Companies: Only three of the top 10 investment management companies this year are traditional trading companies. In addition, the market share of most private equity funds and hedge funds, with little or no previous investment, has grown to 44% this year.

Heavy races supported the measure and exceeded expectations for some. On the other hand, as traditional investors thrive in search of diversity and expansion, venture capital is not the 'power' of the few, nor the uniqueness of a capital investment. with good relations. . Game.

Deding's innovation partner Wang Yuehua told Lianxin that since the birth of the internet, business models have been renamed and industry paradigms have stepped outside of the circle and sought the integration of businesses. Venture capital offers a variety of similarities and challenges.

“Maybe it needs to be regulated, or you need a reliable technology upgrade, or you need investor and investor approval. But whatever it is, investment capital , even the best cooperation, can change.

He said investment firms now face serious polarization issues. On the other hand, the big name ladder is a vertical organization, small and beautiful, which focuses on capital preferences, project quality, after other investment services and on the other hand. . “The functioning of central agencies is very difficult. In addition, the operation of some of the government funds has asymmetric advantages and greater capital, which makes it less efficient. The unique characteristics of the companies in the sector and their advantages.10 ~ In VC, PE It is still a heavy burden for seniors who have worked for more than 15 years.

Currency transactions are sometimes questioned because Venture is accessible to all players in the crypto-financial sector on Web3.0. In the DAO wave, DAO VCs or DAO Ventures are seen as an organization of super individuals and have raised capital to invest in this innovation that seeks to influence the business model is still there.

2,DAOs are born with financial attitudes and investment preferences.

Venture DAO breaks the link between the size of the capital manager's income space so that venture capital is not the “strength” of the few.

The term DAO was originally coined by the Decentralized Autonomous Corporation (DAC) and was coined by Dan Larimer in 2013. Later Vitalik, founder of Ethereum, called for the term DAO (Decentralized Autonomous Organization) as follows : expands its meaning.

The first use of the term DAO as the name of this term was DAO. The project includes the history of cryptocurrency due to the Ethereum curve. Tim Swanson, Director of Business Research at R3CEV, trusts the organization: In fact, the seed capital has been focused on attracting capital for operations related to blockchain sharing and internet application of type (loT).

This shows that DAOs are born with financial attitudes and investment preferences.

Today DAO has become a name, a line.

DeFi will explode in 2020 In order to implement the concept of financial management, some DeFi projects, such as the trade agreement and Sushiswap, have already provided for community governance to bring the DAO strategy back to the market.

The NFT boom of 2021 has achieved and extended 'community autonomy', helping DAOs to expand to a wide range of financial DAOs, investment, gaming DAOs, media DAOs ... anything but the DAO situation has occurred. such as collection-based, self-help, guild management, developer and trade have been established.

Data shows that venture capital increased investment in DAOs in the first half of 2021. Particularly in September of this year, the Syndicate Protocol (Syndicate Protocol) announced its completion at $ 20 million in a Series A financial environment. The partnership between Coinbase Ventures and IDEO CoLab Ventures is the biggest Venture DAO financial record of the year, which means the venture capital funds are affiliated with Venture DAO.

Syndicate Protocol is part of the Venture DAO infrastructure, reducing the initial cost of designing and investing Venture DAO, enabling individuals to integrate and invest in Web3.0 and supporting collaboration between individuals and organizations in Venture DAO.

Several thematic DAO Venture examples were used on the project, giving you an idea of ​​how to get involved in the investment. Among them, IDEO VC is the leader in the Syndicate Protocol fund environment and the IDEO Founding Collective is used to divide the issues and membership of organizations, individuals and communities. Invest in NFTs, Crypto Media, and more.

Three,Venture Dao events and challenges

Wang Yuehua said Venture DAO is also a mature source of ideas and recommendations, and the problems are mainly due to smart contracts and regulations.

“Partnerships with Venture DAOs are increasing in Europe and the United States. For example, at the financial level, smart contracts can be used to limit and enforce the laws and responsibilities of all funds. Collaboration with smart contracts. Design can help make more investment decisions and more efficient, and CAD smart contracts can also provide more valuable services to tasks. Associated income, resources, decisions and controls also possible. Management by CAD smart contracts. - This is a new development in Venture DAO, a new development in the investment industry. However, existing regulations do not support DAO, ”said Wang Yuehua.

Since the legal standard for DAO investments is high, many investors in China like DAO Venture. - Comments from the leader of the Xiaoping cryptocurrency community.

In addition to Delaware, DAO sites can also be registered in Wyoming, Cayman Islands, Switzerland, Liechtenstein, Malta, Singapore, and elsewhere. Depending on the registration site, the physical form of the DAO and its regulations may vary.

However, Wang Yuehua said that although some loose Venture DAOs have appeared in China, "this is only some involvement in project and investment decisions, such as joint ventures and joint ventures after the investment decisions. It's very private, not smart. Contract requirements are required and there is no innovation. And there is minimal added value to the project. "

While Venture DAOs are relatively mature compared to DAOs elsewhere, it is still difficult to define them as a means to an end.

“Actually, there are good conditions in this area. I have never met it before due to the great impact on cooperation, but I think the success of a DAO is usually achieved by the unit of the 'elite. ”Xiaoping said,“ Currently there are many DAOs and they don't see much improvement from 2018. Taking DAOs as an example, there is a problem in measuring the cost of membership positions. . In the past our approach was There were two issues with setting the price and then charging the community, one was for community members to compare the cost of the operation in the store, and elsewhere for DAO d 'send the tokens, if the token itself has valuable support If necessary and the value of the token itself changes, there is a problem with the price of the energy itself. The above problems can easily create friction work and reduce the productivity of the product. "

Also, not all sites can do DAO. “Public health and very new products may be needed. If everyone creates electricity with love, there is no need to think about the matter of income or having an idea that can almost never be done in the real world and quickly put people and money in DAO form. Starting production quickly, for example, I don't think a compromise between opposing the idea of ​​a copy of the law and putting it in the world still do not like the attention of investors in crowdfunding platforms. is possible in the form of a DAO DAO is an innovation in the form of an organization It must be used to innovate Bitcoin is the best DAO because he invented a manufacturing peer-to-peer electronic payment system, traditional spending won't help, "Xiaoping said.