Fund Management
LunarDAO makes investments in privacy projects through the governance process, which includes research, discussion, proposals and voting. The Squad allocates funds to selected teams while building a treasury of its investments. There are several ways how to approach treasury management and govern the funds. For easier understanding we summarized them under two main types: Portfolio (or Investment club) and Syndicate. These two approaches are explained with examples below.
After the genesis event (LunarDAO launch) the default approach to fund management is PORTFOLIO. However the Squad can decide to create separated guilds. To prevent disadvantage of old members' investment dilution, a bonding curve of 10% $VOX price increase is introduced for every new raise event. In the case of a Squad disapproval of opening a new fundraising event (to prevent dilution of past investments) and existing community wish and incentive to join the DAO, a subDAO can be established for the new raise building a separated treasury. In such scenario the different subDAOs manage their own treasuries and their management is based on the SYNDICATE model.
The following table explains these two concepts.
Table 1: Fundamental approaches: Portfolio & Syndicate
| FUND MANAGEMENT – Design Essentials | Portfolio/ investment club | Syndicate |
|---|---|---|
| Description: | All the assets in the treasury are pooled together as a common portfolio. Each $VOX despite the time of purchase represents the same value (1 $VOX = treasury asset net value / # $VOX ). The Squad members can start different sub-DAOs or specific guilds just like in the “Syndicate” option. | Each fundraising cycle (or even each individual deal) is a separated entity in a separated subDAO. The investments or raising cycles can be separated into sub-DAOs or guilds or alternatively tokens representing the past investments are minted based on on-chain snapshot taken at the time of the investment. |
| Exposure to the past investments: | Yes. New members are exposed to the old investments. | No, new members aren’t part of the portfolio of the past, only to the future investments. |
| Aim of LunarDAO launch raise size (minimum, aim, maximum): | 700 ETH, 7000 ETH, 15000 ETH (if hit, the smart contract expires). | As Portfolio |
| How often LunarDAO runs a raise event: | Default: 4x the first year. An investment deal is expected to happen before any next raise. After the initial one, the formed Squad can propose to cap (# ETH) for the next raise or make a sub-DAO and switch into the syndicate option. Every sub-DAO makes autonomus decisions on this question. | This case happens if the Squad decides to separate to subDAOs. 4x the first year. Before any next raising event a new separated sub-DAO is opened for the new members who will manage funds separately from the other subDAOs. Every sub-DAO makes autonomus decisions and can futher continue as portfolio style managed DAO. |
| How often the LunarDAO opens for new Squad members: | Every raising event. If the Squad votes against new fundraising events while there is a strong community wish to join the DAO, a new subDAO fundraising can be opened -> switch to syndicate option. | As Portfolio |
| Condition to join LunarDAO Squad at launch: | Permissionless with a minimum tribute. | LunarDAO launches as Portfolio fund. Conditions to join future subDAOs will be discussed with the community. |
| Condition to join LunarDAO Squad in the future: | Default stays the same (except $VOX price - read below). The initial Squad will has a right to decide whether to keep the permissionless setup, introduce invites, raise the minimum tribute bar, limit the max Squad members or max ETH size etc. | New syndicate sub-DAOs are permissionless. |
| Minimum tribute on launch | 0.1 ETH (10 $VOX). Tribute must be a multiplier of 0.1 ETH. | LunarDAO launches as portfolio based fund. |
| On-boarding contract design: | Contract is opened for a limited period. $VOX (shares) are minted based on members' tribute. If the maximum raise threshold is met the contract expires, no more tributes can be submitted. | As Portfolio |
| On-boarding contract expiry period (1st one/ any next one): | 2 weeks the first raise/ 1 week any other one. | Launch is portfolio type/ the future ones to be decided. |
| $VOX (shares) price on launch: | 1 ETH = 100 $VOX - 0.25% admin/management fee. Each $VOX in the given fundraising period has the same price (every Squad member has an equal entry price). | As Portfolio |
| $VOX value calculation: | 1 $VOX = LunarDAO net value / # of $VOX in existence | Same formula for each subDAO |
| $VOX (shares) price bonding curve: | + 10% each next funding cycle. The squad can evaluate otherwise. | The new members do not have access to the past investments, only the net value of the new treasury. There is no bonding curve. $VOX has the same price like on launch. |
| $VOX-loot price calculation: | Owners $VOX-loot value = owners $VOX (shares) value, without voting power (in the time of GuildKick). Including owners access to the future allocations which are part of the RageQuited treasury. | As Portfolio |
| Squad membership: | Everyone owning at least 1 $VOX is a Squad member. Squad members have voting power. | Everyone owning at least 1 $VOX is a Squad member, however members can vote on treasury decisions only in the guilds/ sub-DAOs in which their $VOX (shares) are allocated. |
| Overall governance changes: | Discussion -> LIP -> vote -> implementation | All the sub-DAOs together and counted as one DAO with vote event. Every 1 $VOX = 1 vote. |
| Management/admin fee: | Entry: 0.25% from each tribute, 0.5% per each investment execution from the treasury. | Same like portfolio, but per each subDAO separately as raising events and investment executions happen in different times and sizes. |
| Further operational expenses: | LIP is submitted and voted upon. | LIP is submitted and voted upon. Two options: a) Divided budget proposals to each sub-DAO, based on their ETH weight (SUM(proposed ETH * sub_DAO ETH / all sub-DAOS ETH total)). b) One proposal to sub-DAOs combined into one DAO. Vote power is calculated from the proposed asset weight from different subDAOs and their members -> SUM(asset weight * # $VOX). If agreed, the payment is sent proportionally to the token weights of the subDAOs and its members. |
Portfolio and Syndicate fund management options are explained below, including examples.