One of the biggest drawbacks in traditional finance is the permissioned and rent-seeking nature of the underlying companies. ETFs and other index funds provided traditional investors with diversified portfolios in a single asset, however, strictly limited the allocation of those ETFs along with tagging them with high annual fees.
Today’s announcement of PieDAO enables the ability for anyone to create a tokenized portfolio allocation, including exposure to both crypto & traditional assets (via synthetic assets). These tokenized portfolio allocations are called “PIEs” which are available to anyone in the world with an internet connection, 24/7, all on the Ethereum network. Importantly, PIEs require no minimum deposits for users along with minimal fees which are shared amongst the DAO‘s active members.
Introducing PieDAO, the asset allocation DAO for decentralized market-weighted portfolio allocations.
— Alexintosh | PieDAO (@Alexintosh) March 3, 2020
The introduction of PIEs and the PieDAO at large brings a new money lego to Ethereum’s composability. Once a core allocation is in place, different PIEs can be bundled together to create new, more stable and diversified PIEs.
With PIEs, DeFi users could access multiple different tokenized portfolios – one filled with traditional assets, the other with crypto assets, and the last with interest-bearing stablecoins – all in a single, easily manageable ERC20 token while incurring minimal fees.
PieDAO is governed by DOUGH tokens where tokenholders are effectively members of the organization. With DOUGH, users are able to participate in the DAO’s governance vote while proposing their own. Tokenholders are able to collaborate and vote on weighing, risk assessment of the assets, rights and fair fees among other things.
Governance will flow from generic Discord discussion, then towards a post on the DAO’s official forum and then finally ending in a financial specification on Github, called the Pie Improvement Proposals (PIPs).
If DOUGH holders do a good job on governing PieDAO, PIEs will get traction and accrue significant fees which are redeemable by governance participants.
In the future, PieDAO plans to integrate more complex governance mechanisms which may include:
- Voting Classes
- New Crypto Economic Designs to Minimize Free-Riding
Decentralized Autonomous Organizations are continuing to see their rebirth since the original DAO back in 2016. The launch of MetaCartel Ventures (VenturesDAO), MetaFactory, MetaClan, the LAO, and dozens of others are paving the path forward for new forms of social coordination over capital, ideas, and more.
The fact that PieDAO is a permissionless organization enables new opportunities for DeFi users. Users looking to invest in a diversified portfolio of tokenized assets (both crypto-native and traditional) now have the option to do so via PIEs. Users looking to be more active in the overall DAO can also earn fees by participating in governance and being an active, governing member of PieDAO.
The potential for DeFi and DAOs keeps on giving. The ability for these two spaces to converge and provide a new paradigm on capital coordination throughout DeFi protocols is mind-bending. Ultimately, these spaces continue to evolve and innovate at breakneck speeds, and we’re extremely excited for what it may hold for the future of PieDAO.
To learn more about PieDAO, you can visit the website or review their technical documentation. If you’re interested in joining in on the PieDAO discussion, you can visit the Discord or the official forum here.
Analyst at Bankless – one of the leading resources for open finance. Lucas is an active contributor to the DeFi ecosystem with appearances in other notable DeFi outlets including The Defiant and Our Network. He has years of experience working with dozens blockchain and token startups where he focused on token economics, marketing, and growth.