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Workflow & Logic
The Process is Simple
SubDAO provides a complete template for developers and managers of Ventures DAO. Hence, anyone can participate without having deep knowledge of computer programming. Also, this preset template eases the Governance process by eliminating the need for constant development and maintenance of the protocol. To create a personalized Ventures DAO, users simply need to follow through with the SubDAO Ventures DAO Template and automatically establish governance by creating a clear set of rules via smart contracts.
The Ventures DAO Template is perfectly suitable for DAOs involving Web 3.0 crypto asset management, allowing multiple users to establish decentralized venture capital. All investment decisions, fundraising, asset management, and equity settlements will be completed on-chain.
There’s more;
The Ventures DAO Template also supports both primary and secondary market investments, as well as NFT assets purchase. In the future, the SubDAO team will upgrade the Ventures DAO Template to allow DEX transactions by supporting dApps like Uniswap, dYdX, PancakeSwap, SushiSwap, and more.
Three Stages
There are three stages involved when using the SubDAO Ventures DAO Template
1. Creation
2. Management
3. Redemption and Dividends.
The workflow and logic are outlined as follows.
1. Creation and the Equity Subscription
This stage requires the DAO creator to fill in the basic information of DAO and set the fund’s subscription information.
The basic information required are: DAO’s Name, Description, and link to DAO’s Twitter page.
After selecting the Ventures DAO Template, the creator will be required to fill in the DAO details.
The DAO details required are: GP Carry, Management Fee, GP Address, GP Bonus, Fund Type, Fund Soft Cap, Fund Hard Cap, Equity Token Name, Equity Token Symbol, Vote.
The usage of the management fee mentioned above will be jointly decided by Governance Participants (GPs); the fee can be used to support hackathons and the GP on-site meeting.
After completing the creation, the DAO Equity Token will be issued successfully. Then, the DAO creator can initiate the “Equity Token subscription.” The subscription time is divided into “GP Period” and “LP Period.”
The information required to initiate a GP subscription includes: Raising Time, Total Raising Ratio of GP, Maximum Deposit per GP, and Minimum Deposit per GP.
The information required to initiate an LP subscription includes: Raising Time, Total Raising Ratio of LP, Maximum Deposit per LP, Minimum Deposit per LP, Whitelist info.
All DAOs are only visible to the creator before submitting an official application to SubDAO for approval. However, 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, the created DAO will move to the management phase. 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. So, for example, if all GPs want to award a single GP the right to temporarily conduct transactions, the smart contract enables them to vote for the desired GP by filling in necessary information like the GP’s public address, the duration of temporary access, and specific fund to access.
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
At the end of the management period, GPs can vote on whether to enter the redemption period.
The redemption period signifies the end of the DAO
The redemption period is perpetual until the last LP (Equity Token holder) redeems their proceeds. However, those who transfer during the management period and no longer hold Equity Tokens cannot participate in redemption.
Some of the rules regarding the redemption period are as follows.
Independent Voting Rights and Equity
GPs are decision-makers, while LPs are shareholders; 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 stablecoins used when LPs subscribed to equity. Before entering the settlement period, GPs need to actively swap other idle tokens into stablecoins which are used for settlement through DEXs.
LP First Principal
When LPs redeem their equity tokens, the GP carried-interest pool will be unlocked accordingly, then GPs can withdraw the unlocked dividend funds during the settlement period – unlocked funds cannot be withdrawn.
Equity Tokens are Negotiable and the Only Proof of Redemption
After successfully fundraising for the DAO, equity tokens can be circulated and transferred. The Equity token is the only proof of redemption because the redeemed tokens will be burned, and the total supply of equity tokens will be reduced accordingly.
Redemption Fault Tolerance Mechanism
Suppose some investments have not been paid off, and not all tokens have been swapped into stable coins before the redemption period, then the current NAV will be lower than the actual value, making the redemption value of those who redeem later higher than the former.
Final Decision Made by GP
Ventures DAO differs from Community DAO in the sense that Ventures DAO enjoins GPs with the responsibility of making leadership decisions; abiding by external commitments at the time of issuance will depend on the GPs’ willingness. When selecting to join a Ventures DAO, each GP should actively investigate the reputation of other GP members, then join after careful consideration.
Last modified 1mo ago
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Contents
The Process is Simple
Three Stages
1. Creation and the Equity Subscription
2. Management
3. Redemption Rules
The redemption period signifies the end of the DAO
Independent Voting Rights and Equity
Single Currency NAV Calculation
LP First Principal
Equity Tokens are Negotiable and the Only Proof of Redemption
Redemption Fault Tolerance Mechanism
Final Decision Made by GP