There is no doubt that DAOs have proven their usefulness in the marketplace. Their phenomenal rise in popularity is shown by a rapid growth in newly established DAOs, increasing DAO membership, and rising cryptoasset holdings over the last year. In fact, the total amount of simple cryptoassets under management that our DeepDAO analytics engine tracks has recently reached over USD 500M, up from a fraction of that amount earlier this year.
As DAOs continue to provide governance for novel purposes such as community goods and decentralized finance systems, the scope of their assets is moving outside of what you see directly in their Ethereum contract and traditional crypto oriented products. DAO holdings have become significantly varied and complex to the point that tracking assets on the blockchain no longer suffices to provide the full picture. Because of this, there is an emergent need to create tracking methods that can account for the various real-world holdings that DAOs maintain in order to fully and comparatively value them.
From the perspective of tracking asset changes over time, understanding the past, current, and aspirational holdings of any given DAO is paramount to capturing present value and forecasting the range of potential future valuation. As an investor, a DAO member, or a researcher into DAOs, making these valuation insights visible and enumerated continues the important transparency role that the blockchain has wholly stewarded in the past.
As the DAO ecosystem has rapidly developed, it is currently unclear how difficult discovery, tracking, and accurate valuation of both off-chain and “indirect asset” tracking actually is. We believe developing consistent methods for both defining assets and valuing them is a much needed service for interested parties to have transparent insight that helps the DAO ecosystem flourish.
** “Indirect assets” refers in this document to assets that a DAO has some governance rights or outright product ownership, either independently or over within another DAO or organization, but that is not simply represented by a fungible, market-valued token. This represents an “implied” or “potential” (soft) monetary value versus a specific market defined monetary value.)
The purpose of this grant is to fund research efforts into modeling and intelligently valuing the various types of off-chain and indirect assets. Additionally we will research automated or other methods for continuously tracking and updating DAO assets in order to improve their transparency. In order to accomplish this task, we will employ our own in-house research expertise and subject knowledge as well as engaging the services of several types of professionals as-needed, including those proficient in accounting and economics.
In short: As the industry matures it is becoming important to have quantifiably accurate evaluation of DAO assets beyond what’s visible on-chain on a DAO’s “wallet”.
The focus of this research is on creating methods to model off-chain and indirect assets held by DAOs in order to obtain more accurate and complete DAO valuations. Specifically, we will center on the DXdao as initial subject to determine their real total value, with others to follow. We will publish a report on the valuations as well as our methods, caveats, and confidence in accuracy of values. We believe this work to be essential to improving public understanding of the DAO ecosystem and its many facets, particularly as it matures and experiences a myriad of new applications for decentralized autonomous governance.
The DeepDAO (https://deepdao.io) team is a collective of DAO enthusiasts (who initially met in a DAO, of course!) who have created a discovery engine centered on analytics and information gathering regarding DAOs and their adjacent ecosystems. Our current products include set of comprehensive dashboards, quantitative reasearching indexes and proprietary data that allows us to provide various services, APIs (still in development) enumerates and ranks DAOs on several key metrics such as membership and assets under management (AUM). We are constantly expanding both coverage of DAOs and the metrics that describe them. We currently report both financial and governance data on 70+ Top DAOs across the five major platforms - Aragon, Moloch, DAOstack, OpenLaw and Colony. Our Data is being used by major research firms (Delphi Digital, Messari), journalists, VCs, and DAOists across the ecosystem.
DeepDAO: Look Broad, Go Deep.
Eyal Eithcowich; Founder of DeepDAO
Entrepreneur with background in software and product creation, writing and filmmaking. Worked at Apple Computer, other Fortune 500 companies and startups.
Ivan Sucharski, PhD.; Head of Research for DeepDAO
Ivan has published several peer-reviewed research papers, performed grant research for the National Park Service, and has advised on data collection methodologies for analytics products for over 15 years.
Funds requested: equivalent of $9000, half in ETH and half in DXD.