What are the differences of veDAO? Analysis report on decentralized investment and financing platform

platform analysis report

The financing needs and scale of crypto projects are large, new projects are constantly emerging, and investors have strong demand for investment. Based on cryptorank data, recently, 1,841 financing events have occurred on the IDO platform; there are 192 upcoming financing events. The tokens of financing platforms have also begun to become a craze for funds.

But there is a long-standing problem in the encryption market, and that is information asymmetry. This problem is particularly significant in the primary market: for ordinary investors, investment opportunities are monopolized by investment institutions and large investors, and many retail investors cannot effectively obtain investment opportunities in high-quality projects; for projects seeking financing, some potential projects are in the early stages of development but lack effective financing channels. This in itself goes against Web3's philosophy of returning rights to individuals. Even though there are some centralized platforms or exchanges that can provide financing channels, they only help projects raise funds, and the later development of the project and the risk management of investors are uncertain.

It is precisely to solve this problem that decentralized financing platforms have emerged one after another. The goal of these platforms is to provide a low-risk investment method that enables global retail investors to participate in venture capital investments. For entrepreneurial projects, some decentralized financing platforms not only provide financing support, but also provide support from the aspects of community ecological construction, token economic model, decentralized governance, etc., to help projects develop better and enhance the confidence and confidence of venture investors. Actual income.

This article will analyze and compare several well-known decentralized financing platforms to understand the advantages, disadvantages and functions of decentralized financing platforms. The article mainly interprets the IDO platform's user participation threshold, project application and review rules, etc.; it also includes _a display of its Token Distribution composition, and interprets the IDO platform with relatively special Tokenomics_ . And display the income ratio data of some financing projects on the IDO platform \ ; however, it should be stated that the income ratio calculated here is based on the closing price and the instantaneous highest price on the market, and only provides a range reference for understanding the income range. .

Raydium is the first IDO platform on Solana. It is based on the Serum exchange and opens up liquidity within the Solana ecosystem through a combination of on-chain order books and automated market makers (AMMs). Now it can utilize the current Serum orders flow and provide the liquidity of its own capital pool to other parts of the ecosystem. The mathematical model currently used by Raydium is 'K=Y/X', and orders will be placed in the Serum order book based on this mathematical model to achieve the purpose of liquidity sharing. In addition, liquidity providers can benefit from direct transaction fees, and important liquidity pools can be rewarded with liquidity based on the total incentive of RAY tokens.

Raydium does not require KYC certification. Platform users can choose different staking duration and amounts to obtain winning tickets. The longer the staking time is selected, the more winning tickets will be obtained. The pledge amount threshold is relatively high. The user's return is determined by the total revenue based on the number of winning tickets.

Raydium collects information about applying for IDO projects through the Google form on the official website, and selects new ones after evaluation. The speed of new projects going online is moderate. On the one hand, screening and checking through the platform can relatively ensure the quality of IDO projects; but on the other hand, this method is closer to the processing method of centralized exchanges.

Token Distribution：

IDO income overview chart:

DAO Maker is an IDO platform that supports multi-chain, which can help with financing in the initial stage of the project. DAOmaker integrates its own platform currency DAO into the overall ecological business, including pledge income, sales claim, platform dividends, etc., aiming to provide new life Projects create growth technologies and finance infrastructure while minimizing investor risk. The platform is powered by ERC20 tokens. The native token 'DAO' has various use cases across the network, applications and governance purposes.

DAO Maker requires users to pass KYC certification to qualify for participation. Users must pledge at least 2,000 DAO tokens to participate in SHO projects, otherwise they can only participate in Public projects; the pledge threshold is very high. In order to obtain all vested Tokens, users must retain their claimed shares throughout the vesting period. Users have 72 hours to reacquire their tokens in case they want to change or extend their staking without losing their vested allocation.

The level is determined based on the number of DAO tokens pledged by the user. Higher levels mean higher chances of winning and more distributions.

In DAO Maker, the listing of new projects needs to be decided through platform review, and the platform controls the quality of new projects to ensure user benefits as much as possible. Like Raydium, it is also a centralized review method, but it can update quickly.

Token Distribution:

IDO income overview chart:

Cult DAO is an investment DAO, which uses treasury funds to invest in other crypto projects. The community votes through proposals, and community members participate in the investment as investors through crowdfunding in a decentralized manner, and then return investment returns to the pledgers of CultDAO tokens in the form of dividends.

But CultDAO is more than just an ordinary investment DAO. CultDAO vividly demonstrated the decentralized consensus through its inciting manifesto (white paper), fully utilizing the decentralized proposal and voting model, destroying private keys and making the contract permanently immutable, and fundamentally established the DAO As the core mechanism, rights are distributed to the guardians and other participants.

If a project wants to be proposed on Cult DAO, there are only two paths: the project itself purchases a large amount of CULT for pledge, enters the TOP50 and becomes a guardian and makes a proposal; or uses other methods to let existing guardians initiate proposals for the project. The IDO aspect of CULT is a community-determined project. There is no need to list fees, and the projects are selected by the guardians.

Tokenomics:

The design of Cult DAO's token model is very interesting and is a relatively tight and self-consistent closed loop. In a theoretical state, guardians and voters work together to obtain high returns through reasonable investment; and then use high returns to attract more funds to enter the market to buy CULT and pledge dCULT to obtain income. This process can increase the token value while reducing the circulation of CULT. Due to the destruction mechanism of CULT, this theoretical process will further strengthen deflation, benefit currency holders, and promote transactions in the secondary market.

But this is a theoretical state after all. As we all know, financial markets are strongly affected by cycles, and we cannot ignore bull and bear cycles, especially in financial markets. If it is a bull market cycle, it is in line with the theoretical state of Cult DAO: the currency price rises, and the project parties rush to obtain funds, and then the project rises, creating a wealth-creating effect, prompting more people to buy CULT, and pushing up the price of CULT. However, if it is a bear market cycle, the wealth effect is absent, and no one wants to finance projects, CULT's value capture ability weakens, leaving only the staking scenario; and the rewards obtained from staking may be further sold off, forming a vicious cycle.

In addition, the decision-making mechanism of Cult DAO is not a clever way. Investment itself has professional thresholds, and high-return investment decisions often run counter to market perceptions at the beginning. CultDAO's proposal voting mechanism decentralizes power to more people in a decentralized manner. It seems that the entire community brainstorms and jointly makes decisions on investment plans, but in fact there is no final decision-maker and can only use the power of the masses, and the elite The lack of investor insight and wisdom is likely to lead to extremely mediocre investment results.

Through the recent controversy between Cult DAO and Panda DAO, it is not difficult to see that the efficiency of the Cult DAO proposal voting process is relatively low. CultDAO's proposal library is like a star's social media. When the guardians select the project and the voters start voting, the project's popularity and traffic begin to skyrocket. Before the project receives investment from Cult DAO, it is enough to attract olive branches from other investors. ;Cult DAO had no time to react and made a wedding dress for others in vain.

As a phenomenal investment DAO, Cult DAO’s concept of doing its best to complete the mission of decentralization through various methods is worthy of people’s respect and admiration; in other words, Cult DAO is like a real Web3 spirit Trailblazers, radically exploring a path no one has taken.

Polkastarter is a DEX protocol built for cross-chain token pools and auction transactions on Polkadot, which allows projects to raise funds in a decentralized, interoperable environment based on Polkadot. Polkastarter allows decentralized projects to raise funds at a low price and quickly. It also allows fundraising through auctions and supports OTC transactions. Based on the rules of Polkastarter, users can participate in project fundraising and support the current ERC20 standard and other standard assets. It has two features: first, it launches a fixed exchange pool, and the project party can set a fixed price for the token for auction; second, the project party can set a whitelist for the token auction, and select a specific address through the whitelist to participate in the auction. Users need Only by completing a series of tasks set by the project party or signing up for a lottery can you obtain whitelist qualifications.

First, only after users purchase and hold POLS coins for more than 7 days, or immediately pledge POLS coins for more than 7 days, will they be eligible to participate in project investment. When users participate in project financing on Polkastarter, they need to conduct KYC certification according to the project's requirements. The threshold brought by the pledge amount is relatively high. User income will be increased at different levels according to the number of OPLS held or pledged, so as to confirm the total income. There will be a 7-day cooling-off period after users participate in IDO. After the cooling-off period is over, they can participate in the next IDO project.

According to Polkastarter's rules, projects need to register on the platform and fill in project information to apply for financing. The Polkastarter Council is responsible for investigating and reviewing application projects. Each council member will vote. Only projects that receive more than 60% of the votes of the council will be approved for launch. Approved projects will receive detailed instructions for preparing IDOs, and the speed of new releases will be faster. quick.

Token Distribution:

IDO income overview chart:

Seedify is an incubator and IDO (it calls it IGO) platform for blockchain games and metaverse startups developed from a DAO. This platform is entirely voted by community members to use treasury funds to provide innovators and project developers. Provide support and provide a complete support system to help promote blockchain games and Metaverse projects. Seedify released the Seed Staking function in early April 2022, which allows Seedify’s native token SFUND to have the opportunity to obtain seed round tokens for free from Metaverse projects incubated and supported by Seedify.

Users need to conduct KYC verification on Seedify before they are eligible to participate in subsequent operations. After staking SFUND, users are eligible to participate in IDO. The more SFUND a user has, the more tokens they will receive from the initial game product. Seedify uses lottery-based allocation for the lowest tier (i.e. Tier 1), and provides the lowest tier with the opportunity to get guaranteed second-stage allocation options according to the Pool weight formula shown in the figure. Certain tiers also have additional benefits such as participating in private rounds, and seed rounds.

Projects wishing to join the Seedify Incubation Program (IDO) must first apply on the Seedify website. Approved projects will receive funding from Seedify’s DAO treasury. In addition to funding, these projects will receive ongoing support and guidance through community feedback and expert advice. After the initial incubation phase, projects can launch an IDO on Seedify; projects can also choose to skip the incubation phase and directly apply for an IDO. Compared with other IDO platforms, Seedify provides a process for incubating projects. This model can gradually increase Seedify's own incubation experience and value, thereby turning the selection of high-quality projects into the cultivation of high-quality projects, which is a long-term benefit to users' income. ; However, it remains to be seen whether this kind of project will be deeply bound to the IDO platform and, despite the participation of DAO, will eventually become a centralized financing model.

Token Distribution:

IDO income overview chart:

By understanding the above-mentioned decentralized financing platforms from multiple perspectives, it is not difficult to find that each of these platforms has its own characteristics and has different advantages and disadvantages. Summarizing these advantages, we can know that the reason why these IDO platforms are excellent and popular is precisely because they have the following characteristics:

1. Allow more people to participate in investment in early-stage encryption projects. The emergence of the IDO platform can impact the selling pressure of traditional VCs or large investors by providing community users with the opportunity to invest in early-stage projects, and gain benefits from investing in early-stage projects.

2. Through smart contracts, investors’ participation and exit are more flexible. Some IDO platforms have relatively loose investment exit rules, and only use income incentives to encourage users to hold on for a long time, rather than through rule restrictions.

3. Use group wisdom to contribute to the value-added investment through DAO decision-making. DAO brings together people of different identities from all over the world to better make valuable decisions and contribute through the centrality of collective goals.

4. Investment is more transparent. Part of the IDO platform manages investment funds (treasury) and decision-making and execution through DAO communication and voting. This requires the entire process to use on-chain behaviors such as multi-signature voting or token pledge voting to provide funds for financing projects. Therefore, the movement of funds and the entire decision-making process are open and transparent, thus further reducing investment risks.

However, the analysis of the above-mentioned decentralized financing platform also pointed out some remaining shortcomings:

1. High participation costs and complex lottery winning mechanisms create an unfriendly user experience. Some IDO platforms have high entry barriers, such as complex KYC mechanisms, high currency holding or staking fees, complex whitelist rules, etc. In addition, although the complex lottery winning mechanism is created for the purpose of motivating users and ensuring fairness, it limits users’ understanding and participation.

2. The threshold for project financing is high and financing is opaque. Most IDO platforms adopt a platform review application mechanism, thereby separating the connection between the financing project party and the investment user, making it a centralized third party. While it brings a lot of inconvenience to the project side, it also makes the speed of new updates slow.

3. The insufficient flexibility of DAO membership has resulted in low decision-making efficiency for some DAO members. The member structure of most IDO platforms is fixed, and member roles are not subdivided, so that members have no division of labor and cooperation, but simply vote; they do not exert the flexibility that DAO should have, and cannot use group wisdom and Elite insights combine to gain capabilities beyond traditional decision-making.

It is based on continuous analysis and learning of the excellent IDO platform, taking its advantages to amplify and optimize, researching and proposing solutions for industry shortcomings and pain points, that veDAO and veDAO community members have the confidence to build a low-threshold, fair and An accessible decentralized investment and financing platform will become the birthplace of top projects in the future.

By setting up a complete operating mechanism, veDAO can build an open, transparent, non-custodial, permission-free, and multi-chain ecological investment and financing market to cultivate a professional, efficient, large-scale collaboration, and autonomous operation investment and financing community.

The mechanism of veDAO is built on the core of DAO governance and decentralized smart contracts. Whether a project can complete fundraising on the platform is entirely determined by veDAO community governance; voting governance, fundraising process, token distribution, and income distribution are all executed in a decentralized manner through smart contracts, achieving true full-cycle decentralization. IDO mode. veDAO not only takes into account the advantages of a decentralized financing platform, but also improves the common shortcomings of decentralized investment and financing platforms through a flexible identity mechanism and a way to maximize the activation of DAO, as well as a low threshold and simple lottery and financing application mechanism. place.

Flexible DAO membership

veDAO has been fully owned and governed by DAO members from the beginning, allowing everyone to receive fair returns based on their abilities. The characteristic of veDAO is to provide the maximum and fairest distribution of benefits. Through a diversified identity system and subdivided member roles, it amplifies the flexibility of DAO and allows DAO members to give full play to their own advantages. Each member can make full use of their own capabilities and needs. Choose one or more identities and get the rewards you deserve for every contribution. veDAO divides the identities of members into 6 types:

If you need financing, you can choose to become a Financier; if you want to be an investor, you can become Investors; if you just want to pledge to obtain income, then become a Pledging user of veDAO. In addition, you can also participate in veDAO as Voters, project explorers (Referees), and business managers who connect project parties with financing needs. Multiple identity systems are how veDAO maximizes the application of DAO: different roles are brought together through veDAO. Members only need to proceed from their own interests, and each member's self-decision can be aggregated into a collective wisdom, thus redefining its The production model realizes the non-Matthew transformation of benefit distribution.

Transparent and efficient operating mechanism

At the same time, veDAO fully combines the collective wisdom of the masses and the insights of elites through the segmented DAO autonomy method, so that the capabilities of elite investors are no longer absent, but become part of DAO to build a true group intelligence brain; ensuring Judge projects neutrally, objectively and professionally, and create a new investment and financing paradigm that truly belongs to Web3.

veDAO provides different types of rewards for users with different roles: In addition to financiers and investors who can meet their needs, Pledging users can obtain mining revenue, Voters can obtain voting revenue, and Referees can obtain recommendation revenue and 1% of the financing amount. , Business managers can receive 1% of the financing amount, etc.

veDAO can ensure the effective operation of voting governance by setting up a reward and punishment mechanism, allowing elites to stand out and obtain better governance benefits. The voting power of voters is determined by the number of veDAO and the voting weight. Voting weight is bound to the voter's wallet address and is non-transferable. Each voter has the same initial voting weight. Voters who vote correctly each time have their voting weight increased, and voters who vote incorrectly have their voting weight reduced. As more and more elites come to the fore, veDAO will allow voters to entrust their voting rights to proxies in the future. Voter agents are called 'Damocleser' and exercise voting rights on behalf of voters. Only Damocleser can accept the entrustment of voters.

veDAO did create veDAO, but veDAO doesn 't belong to veDAO. The future belongs to every participant, who is working hard to expand the decentralization of veDAO.

Follow veDAO for more information

Website: http://www.vedao.com/

Twitter: https://twitter.com/vedao_official

Facebook: bit.ly/3jmSJwN

Telegram: t.me/veDAO_zh

Discord: https://discord.gg/NEmEyrWfjV

[*] Token Distribution and Tokenomics come from the white paper of the corresponding IDO platform

[ __ ] The data used to calculate IDO's initial price, closing price on the first day, and current closing price (based on June 6) come from: the official website of the IDO platform, cryptorank.io, and coinmarketcap.com