Ventures DAO Template — New Experience of Crypto Asset Management

Published date: March 30 2022
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Ventures DAO Template — New Experience of Crypto Asset Management

SubDAO has redefined itself — a multi-chain DAO protocol. Now we are presenting the meticulously developed and advanced Template to the public, first with the Ventures DAO Template.

Ventures DAO Template brought a new perspective for the future of organizations and investments: Creating Ventures DAO with one click, which is a novel way for DAO-based venture capital institutions and groups to participate in Web 3.0. Users can create their Ventures DAO with simple setting steps through the SubDAO Ventures DAO Template and automatically govern by creating clear rules in smart contracts. SubDAO provides a complete template for developers and managers of Ventures DAO. With the template, it no longer needs additional development and maintenance and lowers the threshold for creating and participating in Ventures DAO investment.

The Ventures DAO Template developed by SubDAO is suitable for DAOs’ involving crypto asset management in Web3.0, allowing multiple users to establish decentralized venture capital, and all investment decisions, fundraising, asset management, and all equity settlements will be completed on the chain. SubDAO Ventures DAO Template also supports both primary and secondary market investment including participating in seed financing, purchasing NFT assets, and conducting DEX transactions, and gradually Uniswap, dYdX, Pancake platforms, etc. can be available to be accessed on the Ventures DAO.

There are 3 stages when using the SubDAO Ventures DAO Template: Creation — Management — Redemption and Dividends. The workflow and logic are outlined as follows.

1. Creation and the Equity Subscription

Creation Stage: Fill in the basic information of DAO and set the subscription information of the fund.

When creating a DAO, basic information will include DAO Name, Description, Twitter link to DAO, then select the Ventures DAO Template and fill in the basic information of the Ventures DAO including GP carry, Management Fee, GP Address, GP Bonus, Fund Type, Fund Soft Cap, Fund Hard Cap, Equity Token Name, Equity Token Symbol, Vote. Among these items, the usage of the Management Fee will be jointly decided by GPs, such as to support hackathons and the GP onsite meeting, etc.

After completing the creation, the DAO Equity Token will be issued successfully, and the DAO creator can initiate the Equity Token subscription. The subscription time is divided into “GP Period” and “LP Period”.

To initiate a GP subscription, information required to complete includes Raising Time, Total Raising Ratio of GP, Max Deposit per GP, Min Deposit per GP.

To initiate LP subscription, information required to complete includes Raising Time, Total Raising Ratio of LP, Max Deposit per LP, Min Deposit per LP, Whitelist.

All DAOs are only visible to the creator before submitting an official application to SubDAO. The creator can share the link with GPs and LPs who need to participate in the subscription, or fill in the information on the “Homepage Display Application”.

2. Management

After the subscription is completed, it will enter the management period. During this period, GPs can conduct various investment and management behaviors, including Vault fund transfers (participating in the project’s seed round financing), Management Fee fund transfers, NFT transactions (Opensea, etc.), Swap Tokens (Uniswap, Pancakeswap, etc.), Add GP, Remove GP, and GP voting to determine the fund redemption period.

Fund transfers are directly triggered by multi-signature voting, while NFT and Swap are executed in an “Approve” action. For example, all GP’s vote to approve a GP to temporarily have the right to conduct transactions. In this contract, the information required to be filled includes GP Address, Duration, and Fund.

When a GP initiates a vote for Remove GP or Add GP, the GP Address and new GP Bonus allocation ratio need to be filled in.

During the management period, all Equity Tokens are negotiable.

3. Redemption Rules and Calculation Formula

At the end of the management period, GPs can vote on whether to enter the redemption period. The DAO has theoretically completed its mission once the fund enters the redemption period. The redemption period is perpetual until the last LP (Equity Token holder) redeems the proceeds. During the management period, those who transfer and no longer hold Equity Token cannot participate in redemption.

Some of the rules regarding the redemption period are as follows.

Independent Voting Rights and Equity

GP is the decision-maker, while LP is the shareholder without any voting rights, they are independent of each other

Single Currency NAV Calculation

During the redemption process, the current NAV(net assets value) is calculated by only one single currency, usually based on the stable coins used when LPs subscribed equity. Before entering the settlement period, GPs should actively swap other idle tokens into stablecoins used for settlement through DEX.

LPs First Principal

When LPs redeem their equity tokens, the GP carried-interest pool will be unlocked accordingly. GP can withdraw the unlocked dividend funds during the settlement period, and the unlocked fund cannot be withdrawn.

Equity Tokens are Negotiable and the Only Proof of Redemption

After the fundraising of DAO funds is completed, equity tokens can be circulated and transferred. The Equity token is the only proof of redemption. The redeemed tokens will be burned, and the total supply of equity tokens should be reduced accordingly.

Redemption Fault Tolerance Mechanism

During the redemption period, Some investments may not have paid off yet, and not all token assets have been swapped into stable coins. This will cause the current NAV to be lower than the actual value, and the redemption value of those who redeem later is higher than the former.

Final Decision Made by GP

The difference between Ventures DAO and Community DAO is that Ventures DAO is a DAO organization in which GPs make leadership decisions. Whether GPs abide by the external commitments at the time of issuance will depend on the GP’s willingness. When selecting to join a Ventures DAO, GP should actively investigate the reputation of GP members, then join after careful consideration.

The calculation formula for fund redemption is as follows:

Calculation of LP Redemption

NAV < Initial Fund Size

Return = NAV*（Equity Token Amount /Total Supply of Equity Token）

NAV > Initial Fund Size

Return = Initial Fund Size*（Equity Token Amount /Total Supply of Equity Token）

+ (NAV — Initial Fund Size) * (1 — GP Carry Ratio) *（Equity Token Amount /Total Supply of Equity Token）

*NAV is the total value of the current token and in addition to the Management Fee.

Calculation of GP Dividend

NAV > Initial Fund Size

Return =（NAV — Initial Fund Size）* GP Carry Ratio

4. Claim Test Coin

Testing SubDAO Ventures DAO will require all participants to claim the test coin!

Please leave your BNB address on the form: https://docs.google.com/forms/d/e/1FAIpQLSeLLWjlk-fIn91wq4tv0iSGYjXcK4bgC9NH48IvB3yTbu75yA/viewform

For a better experience of the new templates, we will initiate the Ventures DAO Template Testing Event shortly, and you are welcome to participate! Follow our official social channels to check more information!

About SubDAO

SubDAO is a multi-chain DAO protocol. It allows any decentralized organization to swiftly create and manage DAOs. We are committed to serving as a Web3.0 entry by providing blockchain-based digital agreement signing, DAO social networking, asset management, and other tools and services.

The founding team of SubDAO is composed of the former Technical Team leader of the IBM Group and many early well-known developers from Polkadot. SubDAO has completed multi-million dollars financing from dozens of institutions including Hypersphere, Huobi Ventures, OKEx Blockdream Fund, as well as investment by Messari founder Ryan Selkis.