Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
Why decentralised autonomous organisations are the future of investing
DAO, pronounced “Dow,” is the latest buzzword among crypto enthusiasts. But what does it mean?
No, it’s not a shortened nickname for the Dow Jones Industrial Average, and no, it’s not a Chinese Mandarin word for pathway. DAO is a newly formed acronym that stands for Decentralised Autonomous Organisation.
A DAO is a new kind of organisational structure built on blockchain technology. In its purest form, a DAO can be seen as “governing bodies that oversee the allocation of resources tied to the projects they are associated with, and are also tasked with ensuring the long-term success of the project they support.” Once the Dao is formed, it’s run by its members governed by its smart contracts or crypto tokens and the rights attached to them.
Still lost?
Ok. Let me give you an example, taken from the New York Times.
“PleasrDAO, a group of dozens of crypto artists, entrepreneurs and investors that was formed to bid on works by high-profile digital artists. The group spent $5.4 million on an NFT affiliated with the whistleblower and activist Edward Snowden, and also bought the Wu-Tang Clan album “Once Upon a Time in Shaolin” for $4 million.
“Once they were purchased, these works became the property of the DAO’s members, who can manage them as they see fit. They can vote to exhibit them somewhere or break them into 1,000 NFTs and sell the pieces to the public, or simply keep them locked away in a physical or virtual vault. In a classic DAO model, all these decisions would be made ‘on-chain,’ through a system of token-based voting.”
In other words, a DAO can be seen as a new-age venture capital firm or Kickstarter-like funding platform that can raise large amounts of money by pooling investor funds together to purchase a project or asset via tokens.
In the world of finance, this is called capital raising, but in decentralised finance (DeFi), we step into the amazing world of Tokenomics.
This is why a 111-year-old firm called Bessemer Venture Partner is turning its venture capital firm into a DAO; in other words, a decentralised venture capital firm. The biggest firms are now starting DAOs, communities that pool cryptocurrency tokens and vote collectively on the group’s activities.
Bessemer Venture Partners is the first to take the leap. The San Francisco-based firm recently unveiled BessemerDAO, a group for discussing trends in the crypto industry and sharing resources. The firm has also earmarked $250 million of its new $2.5 billion fund for crypto deals.
In a CoinDesk article, the Bessemer team wrote, “It’s clear that we’re now at the onset of the next seismic shift: a new iteration of the web built on blockchain technology. Web 3 is an ecosystem that we believe has several decades of transformation ahead of it, and is one we’re passionate about partnering with the most talented founders forging this new future.”
The aim is to build a community in the crypto world built to manage projects such as token incentives using tokenisation or fractionalisation. No word yet on a token, but Bessemer is the first to release the idea of democratising the economics of venture capital.
