Why is veDAO the best decentralized financing platform at present?

In 2021, there were a total of 1812 financing events in the global blockchain industry, with 1433 disclosing specific financing amounts totaling 48.674 billion US dollars. However, a large number of ICO, IDO, IEO, and ITO financings were not included in the statistics. New projects continue to emerge, and there is strong demand from investors, leading to a surge in funding for financing platforms.

Currently, many financing platforms in the market have more or less the following six problems:

High participation costs: High entry barriers, dominated by capital, institutions, exchanges, etc., unable to guarantee the fairness of individual user participation.

Mixed quality of projects: The quality of projects on IDO platforms is not guaranteed, lacking professional evaluation and discovery mechanisms, resulting in high risks for individual user participation.

Complex lottery mechanism: The lottery rules of many IDO platforms are complex, making it difficult for users to understand and participate.

High financing threshold: Whether the project chooses to seek VC financing or list on centralized exchanges, they face strict screening conditions and listing costs.

Opaque financing: The use of funds by the project party cannot be traced, and the cooperation mechanism with the financing platform is not transparent.

Lack of community recognition: IDO platforms lack widespread recognition of projects by the public, making it difficult to attract individual user investment.

veDAO addresses these pain points by establishing a complete operational mechanism, thereby being able to build an open, transparent, non-custodial, permissionless, multi-chain ecosystem for investment and financing markets, to cultivate a professional, efficient, large-scale collaborative, and self-operating investment and financing community; to build a low-threshold, fair, and accessible investment and financing platform for everyone, and become the birthplace of top projects in the future.

So how does veDAO solve these pain points? Let's take a detailed look through the operational mechanism of veDAO.

The mechanism of veDAO is built around DAO governance and decentralized smart contracts. Whether a project can raise funds on the platform is entirely determined by the veDAO community governance; voting governance, fundraising process, token distribution, and profit distribution are all executed in a decentralized manner through smart contracts.

1. Applying for financing

(1) Project submits financing application

The project initiates a financing application on the platform and submits project information and token sale information. Depending on the scale of the financing, the project will be required to pledge a certain amount of DAO tokens. After the fundraising ends, the pledged tokens will be fully refunded. If the financing application is not approved, 20% of the pledged tokens will be directly destroyed, and the remaining 80% will be refunded (in the future, the proportion of destruction will be determined by a DAO community vote).

(2) Referees initiate investment proposals

Users who initiate investment proposals on the platform are called referees. Referees discover early high-quality projects, submit project introductions and reasons for recommendation, and initiate investment proposals. Initiating an application requires pledging a certain amount of DAO tokens. If the proposal is approved, the pledged tokens will be fully refunded. If the proposal is not approved, 20% of the pledged tokens will be directly destroyed, and the remaining 80% will be refunded (in the future, the proportion of destruction will be determined by a DAO community vote).

veDAO ensures a positive cycle of investment proposals through this logic, preventing the generation of too many low-quality proposals.

2. Governance through voting

(1) Voting

By pledging DAO (or LP token) to obtain veDAO, users holding veDAO are called voters and have voting governance rights to vote on new applications on veDAO. Each project can be voted on once (using all of the voter's votes), and each project is voted on independently.

Number of votes = veDAO quantity * voting weight

If the number of favorable votes exceeds 80%, the application is approved. If it is less than 80%, the application is rejected.

(2) Voting reward and punishment mechanism

At the same time, veDAO ensures the effective operation of voting governance by setting up a reward and punishment mechanism, allowing outstanding individuals to stand out and receive better governance rewards. The voting weight of voters is determined by the quantity of veDAO and the voting weight. The voting weight is bound to the voter's wallet address and cannot be transferred. The initial voting weight of each voter is the same, and each time a voter votes correctly, their voting weight increases, while voting incorrectly decreases their voting weight.

If an application is rejected, voters who voted in favor are considered to have voted incorrectly. If an application is approved, we will determine whether the actual fundraising amount exceeds 70% of the planned fundraising amount to judge whether the fundraising is relatively successful. If it is judged as relatively successful fundraising, voters who voted in favor are considered to have voted correctly, and those who voted against are considered to have voted incorrectly, and vice versa.

(3) Voter Parliamentarism

As more and more outstanding individuals emerge, veDAO will allow voters to delegate their voting rights to agents in the future. Voter agents are called "Damoclesers" and act on behalf of voters to vote. Only the "sword-bearer" can accept voter delegation. Damoclesers form the veDAO governance committee, with limited seats, and issue limited NFTs for Damoclesers. Damoclesers are an important part of veDAO, a cohesive trust of members, enjoying unlimited glory and rights.

(4) Fair and transparent voting

Voting cannot be falsified or tampered with. When voting, wallet address signature authorization is performed, and the voting results are uploaded to the blockchain for decentralized storage, making it impossible to tamper with.

3. Fundraising

(1) Fundraising process:

Projects that have been approved for voting can initiate the fundraising process. For fundraising applications submitted by the project, the project and veDAO negotiate the start time and listing of tokens/NFTs for sale. For investment proposals submitted by referees, veDAO will initiate the fundraising process, and users will pay a pre-purchase deposit. veDAO will contact the project party to confirm whether they accept community investment. If they do not agree, the deposit will be refunded to the user.

(2) Lottery mechanism:

The purpose of veDAO's lottery mechanism is to allow more people to obtain investment quotas and ensure fair and equitable quota distribution.

When the number of participants is less than the number of units for sale, priority is given to ensuring that each person receives at least one unit. When the number of participants exceeds the number of units for sale, the more veDAO held, the more units received; the more funds invested in IDO, the more units received.

It is these complete mechanisms that ensure veDAO has a fair and equitable widespread fundraising method: for the financing party, veDAO provides a convenient process for applying quickly without permission and KYC/KYB, flexible participation in custom financing prices and quotas, and supports various financing methods such as IDO/INO. For investors, veDAO helps them discover the earliest potential projects, aggregates resources from multiple parties, and continuously provides high-quality projects; through democratic community voting, they obtain real community feedback and maximize investment value through a fair and equitable distribution mechanism.

Follow veDAO for more information

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

Twitter: https://twitter.com/vedao_official

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Telegram: t.me/veDAO_zh

Discord: https://discord.gg/NEmEyrWfjV