DAOs will take center stage in 2022. And investment DAOs will be the best capital allocators that drive high ROIs for investors and innovation within the crypto ecosystem.
In this article, I will share a few key areas of focus regarding DAOs and examine what makes a good investment DAO. Let’s go.
What is an Investment DAO
The first mention of a decentralized autonomous organization (DAO) was in Ethereum’s whitepaper in 2014. It was regarded as a new form of social and organizational structure based on blockchain technology. As a result, DAOs inherit the decentralized nature with no true single point of failure, meaning there won’t be a single leader running the show.
In the crypto ecosystem, DAOs can be formed in many ways. We have protocol DAOs, like Curve and Uniswap, where community members or stakeholders make decisions based on their voting rights. With recent NFT growth, we also see a major uptick in collector DAOs. A few notable ones are Flamingo and PleasrDAO.
Then we have investment DAOs — a group of like-minded folk join forces with their domain expertise and capital to create high ROI and passive income opportunities from investing in different market sectors. By sharing ownership of the treasury and exploring new proposals based on consensus, investment DAOs can democratize access to investing in the web 3 world.
Why DAOs can Disrupt The Investing Game
For years, companies and VC firms were the only ones investing large
amounts of capital in early-stage projects. It was nearly impossible for the general public to join the cap table and have an ownership stake. The high entry barriers in the investing world prevented many asymmetric opportunities.
Well, that now changes with investment DAOs. With a DAO, people can pool capital and invest in projects at their earliest stages. We are now witnessing a narrative shift where projects are more inclined to be backed by communities than VCs. It is because communities drive growth faster and can help create new incentive methods for active participation.
In an investment DAO, people can consistently put their money to work and earn a passive income. It can be through swing trades or flipping NFTs. A DAO has more flexibility to find new opportunities than a VC firm. Because most firms are not diversifying their capital. And they have a hierarchy system which causes company friction.
With investment DAOs, there is more collaboration and transparency, which helps improve the culture of a community and drives more results. By being non-hierarchical, DAOs also increase capital efficiency. DAO members can choose how they want to contribute and add value. With new web 3 tools exploding, it has become even more streamlined to coordinate and manage DAO tasks.
When a DAO reaches a certain level in the ecosystem and has developed a passionate community that believes in the long-term vision, they can also launch their own native token. From what we are seeing right now, it seems as if everyone is looking forward to token launches before building anything substantial. So it is important to build the foundation and build a level utility for community members before driving further capital formation.
Nonetheless, investment DAOs have a competitive advantage over other forms of governance. They will benefit from the network effect. With partial ownership and income-generating opportunities, investment DAOs are trending in the right direction.
Best Investment Areas for DAOs Right Now
The global macro picture is not looking good at the moment. With high-interest rates and FED’s balance sheet rising, the uncertainty around risk assets like crypto increases. As a result, we see market-wide sell-offs and investors rotate into safer asset classes.
We know the money is flowing out of the system, but where is it going?
NFT search volume comparison
The best performing sector in crypto right now is NFTs. Irrespective of global market conditions, the NFT and metaverse gaming space is booming. With mainstream involvement from big tech companies and brands, the future of NFTs is promising, to say the least.
Some companies exploring the metaverse are :
- Warner Music
- Brooklyn Nets
Eventually, every big company, brand, artist, and the creator will have an NFT strategy. There is just too much money flowing around, and everyone wants to have a piece of the pie.
The best part is witnessing the decoupling of crypto and the NFT market. It no longer matters if the crypto market is performing well or not. People will keep flipping NFTs and playing metaverse games. It has become this phenomenon where NFTs provide better opportunities for people to join communities and grow their networks.
For example, let us take the Bored Ape Yacht Club. In less than nine months, the project provided more than 1000x returns to its early supporters. Now, every celebrity, entrepreneur, and sportsperson wants to rep Bored Apes. The community is fantastic. They make you feel like you are a part of an exclusive club. It is ultimately serving them as a status symbol.
We also have projects coming up that use NFTs as an avatar in the metaverse. The demand for such avatars will be very high, given the utility is on par. What we are seeing is a cultural shift. People are taking control of their work and digitizing it in NFTs. It can be anything. Music. Games. Art Collections.
Now, most of us can’t jump in on every investment opportunity and increase exposure in the NFT space. The uncertainty is too high, and so is the volatility. How can we overcome that?
You can join an investment DAO focused on NFTs and metaverse sectors. There will be guaranteed rewards with an investment DAO, and you don’t have to chase any collection to be profitable.
Most new NFT enthusiasts try to chase the following 100x collections. They fall prey to low-grade collections with inflated social media numbers and roadmaps in the process. By joining a DAO, you can avoid this and enjoy passive rewards.
How to pick the Perfect Investment DAO
There are many factors you need to consider when joining a DAO. Here are a few to help you find the right one:
Most DAOs claim they are transparent, and everything operates in a decentralized manner. But in reality, the decision-making process is done by only a few community members. This is very important because when it comes to the DAO treasury, you need to know who is managing and how they are managing the funds.
We have repeatedly seen that people use funds for their reasons without indicating the community. So the core team must reveal their identity and share their background. If it is someone anonymous handling funds, it is always fearful for new investors to join the DAO.
Passive Income Opportunities
You want your money to work for you, right? Then you need to join a DAO that consistently rewards community members. You also need to understand how the DAO generates more revenue every month. You need to know whether the team is following a proven approach to increase ROI or they are spreading out risk to get higher rewards.
It is better to take a conservative approach and slowly build the treasury. Because once the DAO gets bigger and bigger, the opportunities will keep coming, and more rewards will be distributed. Especially for a DAO in the NFT space, you need to see if they are diversifying funds into different asset classes. For example, some of the popular categories in NFTs are virtual real estate, PFP projects, and yield generating NFTs. This allows the DAO to grow treasury, irrespective of how the market is looking at any point in time.
Active Participation by Shareholders
You need to be a part of a DAO that is completely based on consensus. If community members are not on the same page, it will create problems in the future. A DAO needs to promote voting rights and encourage members to actively participate in tackling this.
In most DAOs, shareholders with more voting power influence many decisions. This is not a good model because, in the case of investment DAOs, we need to consider every fund contributor and listen to what they have to say. Every opinion should be taken into account, and voter turnout should be high. Then we can say that a DAO truly shares economic and social components, improving overall digital coordination in a community.
IBC DAO: An Emerging Community-Funded DAO Focused on Metaverse & NFTs
One of the leading capital allocators in the NFT and metaverse space is IBC DAO. In less than two months since its inception, the DAO generated massive rewards for its genesis members. It is looking to go public by launching an NFT collection and sharing ownership of the DAO treasury. Here is everything you need to know about IBC DAO:
What is IBC DAO
IBC DAO is a decentralized organization backed by one of the oldest crypto publications in India, Itsblockchain.com. The DAO represents the essence of decentralization with a community spread across the globe. United and ignited by the blockchain community, IBCDAO aims to bring value and achievement into the lives of all of its present and future members. IBCDAO is more than a financial outcome, it’s more than a membership. IBC DAO is about building the future of blockchain and the intersection of real-life and the metaverse.
Purpose of IBC DAO
Creating IBC DAO aims to make passive income opportunities for community members and help grow the NFT and play-to-earn economy. The DAO also wants to support talented gamers by initial investment in our gaming guild.
Progress So Far
The DAO has made incredible progress in just two months. The treasury is growing rapidly, with more than 40% returns.
In addition to treasury growth, the DAO has paid out nearly 19 ETH in rewards for its genesis community members. The genesis members raised a total of $500k in the initial crowdfund. They also received a unique set of NFTs, representing IBC DAO’s diversity and global presence.
As you can see below, the DAO has grown total assets to more than 200 ETH, with 30 ETH left in the treasury vault. This is after paying out rewards.
Some of Our Best Performing Assets
- 3X3 Connected Land Near Republic In The Sandbox Metaverse
- NFT Worlds
- World of Women
- Capsule House
The DAO also partnered with a leading metaverse real estate project, Ethereum Towers. DAO remembers receiving 20 standard apartments and 2 luxury apartments. With this deal, IBC DAO is the proud resident of the 86th floor.
Hitesh Malviya is the founder of IBC DAO and Itsblockchain.com. He is an early adopter of crypto and built and assisted many startups in the Indian tech ecosystem. Some of them are Hindustan Cyber Force, HCF, Digital Gorkha, and Sriyaan Technologies.
He is also a venture capitalist for IBC Capital. For IBC DAO, Hitesh shares his investment ideas and helps community members navigate the NFT space. He also manages full management operations for the DAO and media publication.
The DAO is planning to open to the public in March, 2022. It is looking to provide ownership by selling NFTs. So people can increase their share of the treasury by owning more NFTs.
There will be 1250 NFTs, with 500 reserved for the public and the rest going to genesis members for their initial fund contribution. The money raised will increase our NFT assets and grow our treasury even more.
DAOs are here to stay. So are NFTs and metaverse projects. If you want to be a part of this revolution and earn passive income, investment DAOs are your best choice. You don’t have to keep tracking hundreds of new collections to see results. You can just park some capital by joining a DAO and enjoy passive rewards. IBC DAO is one such community that can help you grow in this fast-moving NFT ecosystem. Join now and reap the rewards forever.
For more details on the NFT drop, hop into our discord community. We won’t bite.
Also, give us a follow on Twitter: IBC DAO.
Born and brought up in India, Karthikeya Gutta is a crypto journalist and freelance contributor for ItsBlockchain. He covers various aspects of the industry with in-depth analysis and research. His passion towards blockchain and crypto ecosystem is mainly because he believes it can really change the world and help millions of people.
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