For those of you who have been keeping up with the DAO space, you may have heard of MetaCartel – a DAO aimed at funding the Ethereum application layer. As it exists today, MetaCartel is structured as a non-profit, effectively using pool funds to issue grants.
In this article, we’ll be sharing insights on the newest progression in the DAO ecosystem – Namely that of MetaCartel Ventures – a for-profit DAO aimed at making early-stage investments in Ethereum applications.
Earlier today, MetaCartel Ventures (shortened to MCV in this article) released its official whitepaper, effectively outlining the playbook for how the Delaware Limited Liability Company will source deals, make investments, introduce new members and more.
What’s interesting to note is that MetaCartel Ventures will be seeking to allow non-accredited investors to participate in the DAO as those actively sourcing deals and talking with founders. The entire premise of the DAO is that these individuals must be active in order to remain involved with a native reputation system that aims to deliver “points” to individuals for various actions.
What Makes this Unique?
While we’ve seen quite a lot of new groups popping up as forks of Moloch DAO in the past year, this announcement marks the first notable for-profit DAO – a structure that many of us have long been waiting for.
Unlike many other DAOs in which share value is expected to diminish with the issuance of new grants, MCV is focused on aggregating value back to shares through claims tokens, or those that entitle individuals to rights on specific deals.
In practice, MCV will likely be investing across a wide range of vehicles from equity to security tokens to tokenized debt and even traditional utility tokens or other DAO shares. All this goes to say that the inner workings of the DAO will have a large number of positions similar to a traditional VC firm. What makes MCV unique is that all of these positions will ultimately be tokenized, meaning that MCV participants will be able to monitor all their claims through a supported Ethereum wallet.
Beyond the investments themselves, MCV membership is permissioned, meaning that new members must be voted in by the existing shareholders. This is exactly how MetaCartel and Moloch work today, with the exception of one new (and quite novel) feature called GuildKick.
This new mechanism allows existing members to kick a malicious actor out of the DAO, something that was previously not possible in old structures. In combination with further updates to the RageQuit function, MCV is uniquely positioned to be at the forefront of innovation when it comes to crowdsourced early-stage investments.
The Finer Details
It’s important to note that MCV will be assigning three unique roles to different members in the DAO. These roles are mages, goblins and summoners. Here’s a quick overview of what each class is responsible for:
- Mages – Those actively sourcing deals, conducting due diligence and asset management. Requires active participation and will mainly consist of non-accredited investors.
- Goblins – Passive investors contributing funds to the DAO to be invested in deal. This role is assigned to accredited investors who wish to contribute without actively sourcing deals.
- Summoners – Operational delegates for MCV responsible for coordination, legal and financial tasks for the DAO to make investments in any given deal.
All of these roles are interchangeable, meaning that it’s possible for a Goblin to be a Goblin-Mage or a Mage to also act as a Summoner. What’s interesting is that this structure paints clear definitions of ones given role(s) within the DAO, which up until this point has been more or less unspoken/non-existent.
What to Expect
As MCV seeks to raise funds in the coming months, it’ll be interesting to keep an eye on which projects are receiving shares from the grant-giving DAO itself. It’s likely that a number of those projects will be some of the first targets for MCV investments, although this structure does allow MCV to pursue more advanced projects too.
DeFi is one area that MetaCartel has been quite active in, and there’s no doubt in anyone’s mind that many of MCV’s first investments will likely be in the sector.
If one thing is for certain, MCV is seriously challenging the notion of community insight, with it’s members forcing crypto funds to bring their A game when it comes to leading the next unicorn.
In the meantime, we recommend staying up to date with MCV through their official Twitter account here.
For more news on all things DeFi, be sure to follow us on Twitter as well!
Disclosure: I am currently involved with the MetaCartel grant-giving DAO as a shareholder and active contributor. I fully plan on participating in MCV when and if the opportunity presents itself.
Cooper is the Editor of DeFi Rate and a contributor to leading DeFi outlets like the Defiant and Bankless. He is active in the DAO ecosystem through projects like MetaCartel and Raid Guild where he seeks to incubate governance models and grassroots community development. He is an ambassador of Set Protocol and the Director of Fitzner Blockchain Consulting where he authors a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.