ISO, A Low-risk Financing Approach for Small DAOs

nutbox.mine (69)in #walnut • 3 years ago (edited)

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DAOs are hot now. Many people think that 2022 will be the primo anno of DAO. ConstitutionDAO has kickstarted the “Spring of DAO” ahead of schedule at the end of 2021, and AssangeDAO will further ignite the market. Social DAO —— FWB is highly sought after, DeveloperDAO NFT is hard to get, BanklessDAO is extremely popular......

However, a closer look at DAO donation or funding platforms such as Juicebox and DAOhaus reveals that the reality is slightly different from what we perceived:

The DAO ranked 20th on Juicebox has only received less than $80,000 in donations;

The DAO ranked 10th on DAOhaus has only received less than $90,000 in donations；

However, a closer look at DAO donation or funding platforms such as Juicebox and DAOhaus reveals that the reality is slightly different from what we perceived:

The DAO ranked 20th on Juicebox has only received less than $80,000 in donations;

The DAO ranked 10th on DAOhaus has only received less than $90,000 in donations；

The web is a gift for everyone, as its inventor Sir Tim Berners-Lee said: "This is for everyone". In the age of Web 3.0, in order for everyone to reclaim ownership of the Web, we believe that "DAO is for everyone". From this perspective, DAO is far less sexy than we reckon.

When we think about all this, the lack of utilities for DAOs is the core reason. At the same time, we have also seen that the current approach for DAOs to obtain donations or financing is basically the ICO method that was popular in 2017, even though Ethereum founder Vitalik had proposed "Explanation of DAICOs" in January 2018.

Solving the financing problem for small DAOs is at the core of realizing "DAO is for everyone".

We propose an ISO (Initial Staking Offering) method here. ISO is a way of issuing Tokens through Staking. Participating users only need to delegate the rights and interests of the staked PoS Tokens they hold to the DAO community to receive the DAO community token (communityToken). The DAO community in turn gets the Staking Reward for the PoS Token that has been staked.

This approach has the following advantages:

Stake minting of communityToken, providing basic value support for the communityToken;
The PoS Token of users are staked on PoS chain, its security is protected by the PoS chain, and ownership is always retained by the users；
Lower participation costs, and lower risks of fund loss, balancing the innovation of ICO and the omnipresent fund-loss risks;

Some people will think that the DAO community only receives the Staking Reward of PoS Token by block, and its financing efficiency is too low. This is the disadvantage of ISO no doubt. However, when we think of its huge potential market, this shortcoming seems to be more than compensated.

It can be seen from Stakingreward that the top 10 PoS chains have a total of $136 billion in underlying assets staked globally, and the annual staking reward is as high as $9.7 billion. If 10% of the staking reward is used to support the launch of DAOs through ISO, nearly $1 billion of funds will be funneled into DAOs every year, driving the realization of "DAO is for everyone".

After the DeFi Summer and NFT mania, Staking Economy will very likely take over and drive the further development of blockchains. Just like the cold winter of 2018-2020, Staking Economy silently supports many projects and entrepreneurs. Staking Economy will revive through ISO.

Appendix：

Polkadot Crowdloan

An ISO approach to help parachain launch. Community users will hold PoS Token (DOT) for staking through parachain, whereas parachain will get the right to access the Polkadot relay chain (Staking Reward), and community users will receive parachain Token.

Currently, 10 parachains have been launched through Crowdloan, and 11 parachains are being launched through Crowdloan. Polkadot Crowdloan is staking a total of 129 million DOT, accounting for 13.1% of the total DOT supply, and the staked assets reached $2.3 billion.

Walnut ISO

Nutbox Walnut enables anyone to create a community ISO module without coding, any DAO can cold-launch through the ISO module.

ISO Module Creation Tutorial:

https://nutbox-io.gitbook.io/nutbox/create-a-dao/create-a-dao-in-3-minutes