Viewpoint: Why should crypto investment be DAOized?


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The DAO structure is most beneficial to investment, or it will overturn the existing landscape of asset management.

Written by: AladdinDAO
Compiler: Perry Wang

In the article of the same name (1) , we dug into the definition of decentralized autonomous organization (DAO) and analyzed the difference between DAO and DO.

As the second part of this series, this article aims to dig deeper into investment DAO and demonstrate why investment should be DAO. We believe that the DAO’s structure is the most beneficial for investment, and this structure is bound to overturn the existing landscape of asset management.

This new structure is particularly attractive in the investment field because it frees talent from the constraints of traditional corporate institutions and enables them to form a network of contacts and develop together.

Crypto investment is not alone

But this is not the reason why investment should be DAOized. IMHO, the biggest reason DAO can benefit investment is the absolute difficulty in the field of crypto investment. As many people know, the crypto asset market is changing rapidly, and it is increasingly difficult for any individual or institution to keep up with the rapid and systematic changes in crypto assets.

In addition, crypto investment requires multidisciplinary knowledge. It requires expertise in the fields of economics, finance, engineering, marketing (really critical!) and network marketing (of course). It also requires skills such as the ability to find projects on a global scale, which naturally requires a deep understanding of how culture plays a role in shaping the global encryption landscape.

The question now becomes: Where can I find people with all this knowledge? It is unrealistic for traditional asset management companies to hire world-class experts in various fields of the army. This is too expensive and will cause unnecessary management problems.
The answer is: no need to find one of the experts. Find a bunch of these people so they can share knowledge, information, and opinions. The goal is to get as close to the truth as possible.

Investment DAO Classification

Our understanding of DAO and our understanding of investing in DAO is still in its infancy. In our opinion, there are currently several different types of investment DAOs, and a detailed classification of them will help individuals choose the most suitable organizational model for them:

Investment club

Most investment DAOs today fall into this category, including Metacartel and the LAO. It is a club formed by a group of crypto experts who work together to find projects, do due diligence and make investment decisions. Its membership requires permission, and the voting power of a general partner (GP) is equal to its LP share.

Since the explosive growth of decentralized finance (DeFi) last summer, investment clubs have also shown an explosive trend. These DAOs not only contributed capital to DeFi, but also became ambassadors for their investment portfolios on social media (CT!). In the crypto space, this kind of publicity is important because this is how the project gains initial traction, which helps these DAOs succeed.


The DAO is a true pioneer in the field of encryption. Starting from a phenomenon-level experiment in 2016, it tried to establish a truly decentralized investment club without permission. In this model, GP and LP have the same voting rights. Although The DAO ended in a catastrophic way, it paved the way for how the DAO should be organized.


An interesting development in the field of investing in DAO is the use of DAO to build a market. This is the territory where AladdinDAO can use his fists.

AladdinDAO is a screening service platform for income cultivation projects managed by DAO. It uses game theory to build a tripartite win-win market for DeFi projects, income-farming farmers, and DAOs.

AladdinDAO follows the essence of the asset management market, that is, managers put in work and intelligence, and users benefit from it. This is the only broad road where investment DAO can achieve scale while maintaining market effectiveness.

In the structure of AladdinDAO, the investment entity can be expanded to thousands or even tens of thousands of asset management managers, and it is possible to provide services to billions of users around the world.

The original Boule committee consisted of members recommended by the DAO and the first batch of supporters in the community. All nominated Boule members need to be elected by the community before they can be appointed. Next, the Boule architecture will be based on the development and evolution of on-chain algorithms. Talented contributors can join the community without permission and get paid based on their performance. There are no operating expenses. There is no office political struggle. AladdinDAO’s long-term vision is to build a decision-making engine based on popular wisdom as human society floods into the encrypted world.

Human decision or algorithm decision?

Why do we make such a fuss about whether changes in organizational structure should be determined by humans or by algorithms? The reason is that human decision-making is often affected and distorted by human emotions. For example, many of us have had this experience: our evaluation and compensation are not based on strength and performance, but on whether our boss likes us.

For people with strong competitiveness, it is a heavy burden to win the trust and social status of people around by pleasing others (this is especially true for many introverted cryptographers).

Trust has always been a luxury in human society, and it takes repeated games to build trust. And trust is also very fragile and can be broken at any time. Catering to social interactions and creating so-called personal settings is a more complex game and requires corresponding exclusive skills.

Cryptoeconomics brings new possibilities to the world; people can play non-cooperative games. More than 7 billion people can transact and collaborate on a global scale without even knowing each other. With the help of on-chain transaction and voting history and personal records ranked by reputation system, for the first time in history, we only need to do things according to logic, not favors. The difference is that the former provides certain rules of the game, while the latter is more of a random walk.

So what will be the impact?

All in all, as technology continues to reduce information and transaction costs in cyberspace, many of the advantages of enterprise architecture will tend to weaken, and it will inevitably be necessary to redesign the organizational structure inherited from the industrial age.

There will be DAOs that gather talents for various purposes, many of which will be more efficient and competitive than the company. The competition in nature is based on the competition between bees, not between bees. In the era of the rise of DAO, it is time to find and build your own online tribe.

Disclaimer: As a blockchain information platform, the articles published on this site only represent the author’s personal views, and have nothing to do with the position of ChainNews. The information, opinions, etc. in the article are for reference only, and are not intended as or regarded as actual investment advice.

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