Article author: Coinspire
Source: PANews
Introducing two Investment DAOs on Base: daos.world and VaderAI fun
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The popularity of Ai16z and its fundraising platform daos.fun has increased the presence of Investment DAO in the past month.
In short, Investment DAO is a decentralized hedge fund managed by real people or AI agents, which raises funds, generates returns, and returns profits to DAO token holders. It can also be understood as a tool that helps hedge fund managers raise funds. The Launchpad is the aggregation market for such DAOs, with the platform serving as a third-party endorsement.
In fact, Investment DAO is not a new concept. It has existed as a branch since the rise of the DAO concept in 2022, mainly deployed on the Ethereum public chain, with investment directions leaning towards NFTs, DApps, DeFi, and other currently popular narratives. In this cycle, AI Agents and Memes have become the mainstream of investment, with daos.fun positioned as a meme fund launch platform based on Solana.
Today, this wave has gradually shifted from Solana to the Base public chain, such as daos.world and Vader AI.fun in the Base Virtuals ecosystem. Next, this article will focus on the processes and technical features of these two projects, thereby expanding thoughts on Investment DAO.
Daos.woeld
The logic of daos.world and daos.fun is not much different, both focusing on the launchpad of Investment DAO.
First of all, there are two roles for protocol participants:
DAO Manager;
WL (Wait List) participants, who are the DAO fundraisers.
Secondly, the operation process is as follows:
1. Launch DAO: The DAO manager launches a fund to raise ETH on daos.world (currently, one needs to contact the project team via Telegram to obtain a launch opportunity);
2. Pre-sale: Participants who obtain a whitelist choose DAO funds and purchase their shares during the pre-sale stage to raise initial capital. Currently, there are only four DAO funds on daos.world. Taking the highest market cap DAO as an example—$AISTR (AicroStrategy), created on December 19, currently has a market value of $13.14 million, raised 40 ETH, and the initial fundraising plan is to deposit into Aave, borrow USDC, buy cbBTC, and repeat this process, determining the best leverage based on AI algorithms.
3. DAO token minting: After the pre-sale is completed, all raised ETH will be handed over to the DAO treasury, which is held in a smart contract. daos.world has minted 1.1 billion ERC20 tokens to represent the DAO treasury (1 billion tokens are allocated to fundraisers, and 100 million tokens are added to the Uniswap v3 liquidity pool). The price of the DAO token will rise or fall based on the success of DAO trading activities.
Such as the $AISTR liquidity pool on Uniswap
4. Investment: Meanwhile, the fund manager of dao.world trades or invests the raised ETH on BASE in any way.
5. Earnings: The fund has an expiration date. When this date arrives, trading stops, and fundraisers receive earnings/losses according to the proportion of DAO tokens. The manager can extend the expiration date at any time.
Currently, the ways in which various roles profit are as follows:
Fund managers earn fees based on trading volume and profit sharing. DAO managers earn 0.4% from the liquidity pool fees, plus a portion of profits based on fund performance at expiration.
Fundraisers receive earnings/losses after the fund expires and can also trade their DAO tokens before the expiration date. If the market cap is lower than the fund value, they can buy; if higher, they can sell.
LPs participate in providing liquidity to the pool and earn fees.
Image source: daos.world
▎Technical Details
Liquidity pool design: The founder stated on X that by correctly setting the initial tick of the Uniswap pool (initial price), they will ensure that the asset value of this pool does not fall below the amount of ETH raised. Additionally, this pool is designed unilaterally, only containing DAO fund tokens.
Antipull: One of the promotional keywords of daos.world is Antipull. In response to the dozens of rug pulls that have occurred on daos.fun, where fund founders can withdraw all funds unsupervised, use DAO funds to repurchase tokens, and then sell them, depleting the DAO, daos.world emphasizes background checks on DAO fund teams, roadmap reviews, and vision assessments, implementing strict KYC processes before approval, and has recently implemented a multi-signature for its latest Dao (ALCHDAO) to ensure that fund withdrawals require platform consent.
▎Comparison with daos.fun
Similar to daos.fun, both operate on similar principles, differing only in some details. Moreover, the functionality of the daos.world interface is currently less compared to daos.fun. However, each DAO's asset management status will be publicly displayed on the daos.fun page; in addition, the profit-sharing mechanism is also relatively transparent. Furthermore, all DAO creators are associated with their Twitter accounts.
Subtle differences are reflected in the following aspects:
Vader AI fun
In the first part, we mentioned the launchpad of Investment DAO. In this part, we will discuss another popular paradigm of Investment DAO, which is introducing AI as its fund manager, focusing on DAOs in vertical tracks. VaderAI fun plays this role.
VaderAI Fun is one of the features of VaderAI, which is currently one of the AI agent projects in the Virtuals ecosystem on Base. According to the Virtuals official website, as of December 30, there are currently about 510 projects in the Virtuals ecosystem. Among them, VaderAI is one of the four projects with a market cap exceeding $100 million.
The vision of VaderAI Fun is that currently, most AI agents are launched faster than ever before, with over 10,000 Agents launched on virtuals. As the number of Agents increases, their professional fields will vary, making it unrealistic for users to research and analyze each individual agent around the clock—they either lack time or expertise. Investment DAOs enable users to invest in a narrative/theme/strategy without having to do it themselves. At the same time, according to the latest data from Cookie.fun, as of December 30, the overall market cap of AI Agents has reached $11.68 billion, with a nearly 39.1% increase over the past 7 days. This data fully reflects the investment value of the AI agent concept.
In response, VaderAI Fun has launched three DAO funds based on asset size.
Micro Cap (targeting Agents with market values between $100,000 and $2 million);
Small Cap (targeting Agents with market values between $2 million and $10 million);
MID Cap (targeting Agents with market values between $10 million and $100 million).
The investment strategy of VaderAI fun is to aggregate thousands of machine-learning-based trading strategies, clearly define the scope of investment targets (which can be based on market cap or project themes, such as DeSci, DeFi), rebalance frequency, index weighting methods, minimum liquidity requirements, shortest holding time for targets, and maximum holding limit for a single target, trading within the corresponding market cap range.
Taking one of the DAOs as an example,
The scale of the DAO is 50,000 $VIRTUAL.
Actively trading Virtuals agents with a market value between $700,000 and $5 million.
Another advantage of VaderAI Small Cap DAO is access to top agent teams' discounted OTC trades, which are submitted to VaderAI for final decision-making.
3 months initial lock-up period.
Only $VADER stakers can participate.
DAOs are divided into two types based on their managers:
Passive DAOs are managed by VaderAI, which charges a 0.5% management fee and rewards $VADER stakers.
Active DAOs are run by human managers, charging a performance fee of 0-20%, with 20% of the performance fee pool rewarding $VADER stakers.
Image source: @Vader
The process to participate in Vaderfun AI is:
1. Stake $VADER to join the DAO;
2. The currency invested in the DAO will use the ecosystem token $VIRTUAL as funding (after the liquidity and price of $VADER gradually stabilize, it will switch to using $VADER);
$VIRTUAL is the trading/incentive currency, similar to L1 ecosystem tokens, such as ETH, SOL;
$VADER is the agent token, similar to dApps tokens on L1;
3. The DAO fund must retain 10%-20% of $VADER as cash reserve liquidity buffer to meet withdrawal needs and sudden market changes to rebalance assets;
4. Positive earnings generated by the fund will be distributed to participants in the form of $VADER tokens. (Withdrawals will incur a 1% service fee, which will be converted into $VADER and burned, creating a deflationary token economy.)
Among them, approved managers must stake 100,000 $VADER to establish a fund.
Additionally, the profit sources for staking $VADER come from two parts:
The management fees earned by VaderAI (whether active or passive) will be used to repurchase $VADER and reward $VADER token holders;
The 20% performance fee charged by other agents or human-managed active funds will be used to repurchase $VADER and reward $VADER token holders.
Features and risk factors of such DAOs
In fact, Investment DAO has already taken shape in recent years. Its goal is to achieve investment democratization, break the barriers of traditional finance, and empower the majority rather than the minority. The current AI narrative has given it new vitality, but there are still some significant risk factors.
1. The key factor for successful investment depends on the DAO fund manager. For instance, dozens of rug pulls have already occurred on daos.fun, where fund founders can withdraw all funds unsupervised, use DAO funds to repurchase tokens, and then sell them, depleting the DAO. Or if all investments are made in Memes, and the value of Memes quickly drops, the potential value of the fund will also decline. Therefore, investors need to choose investment funds wisely if they want to invest long-term. If investors participate in the pre-sale, they can sell their tokens immediately after issuance.
2. High market cap to net fund value ratio, with a strong speculative atmosphere. For example, daos.world's $AISTR has a market cap to fund asset value ratio as high as 96 times. The high market cap of these funds undoubtedly reveals the current speculative atmosphere in the market and the extremely high expectations investors have for these funds' future performance. However, this also reminds us to be wary of potential market fluctuations and risks while pursuing high returns.
3. Not very friendly to retail investors, although the goal of Investment DAO is to provide equal opportunities for retail investors to participate in potential projects, obtaining a whitelist is a somewhat challenging task, and the open process is not publicly quantifiable, with more access granted to KOLs.
However, daos.world has recently launched a way to obtain WL through staking, which is relatively quantifiable and transparent. This means that staking any one of the four DAO tokens can earn Daos World Whitelist tokens (DWL): After claiming DWL, there are two options: one is to destroy one DWL to obtain WL whitelist; the other is to destroy less than one DWL to join the WL lottery pool. Among them, DWL has no asset value.
Conclusion
The reason for presenting these two projects is not to recommend them; they are merely two representative projects of Investment DAO on the Base public chain. We see that due to the outbreak of ai16z, Investment DAO has been brought back to the agenda. Today, ai16z is no longer just an Investment DAO—it is an open-source innovation movement, a one-stop shop for launching and expanding Agents, and has a strong decentralized network.
At the same time, it also opens up space for Investment DAO:
1. Launchpad projects that benchmark daos.fun and address its pain points will gradually land on various public chains;
2. Investment DAOs focused on vertical tracks are becoming a trend. Currently, AI Agents and Memes are mainstream, and more vertical Investment DAOs may emerge in the future.
Coinspire will continue to monitor what the future of Investment DAO will develop into.
