DXventures Update

The goal of this post is to provide an update on DXventures and a summary of its activities since its formation.

The idea for DXventures started to form in early 2021. You can find an early post here: ​​​Idea for discussion: DXventures

DXventures was ratified into existence by DXdao in March 2021: Signal Proposal: Support for DXventures with the goal to to seek out and support/invest in promising projects that are solving the pain points of decentralized organizations. The problems that DXdao needs solved are the same problems that all DAOs will likely face.

Over the past 1.5 years, DXventures has been operating in “light mode” (no full-time dedicated resources) on an ongoing basis with help from a number of DXdao contributors.

You can find a summary of completed DXventures grant investments here:

Opolis
Date: May 2021
Amount: 100,000 xDAI
Forum: DXventures Grant Investment to Opolis
DXvote (Gnosis Chain): Proposal for Grant Investment from DXdao to Opolis, Inc.
Note: Opolis is building a digital employment cooperative that offers independent workers fully portable benefits, payroll, and shared services - a platform highly needed by DAO contributors.
Update: Opolis is growing. It’s still in the US only but has its first expansion plans outside the US coming soon. At 1k users, the Commons can take over.

Hats
Date: Sep 2021
Amount: 100,000 USDC Grant Investment
Proposal for DXventures Grant to Hats
DXvote (mainnet): Proposal for Grant Investment from DXdao to Hats.finance
Related: DXdao also passed → Proposal to sends 790 DXD to the Dev Multi-Sig to be deposited into the Hats Finance<> DXdao vault
Note: Hats provides a decentralized cybersecurity incentive network, governed by its community of stakeholders – Hackers, Projects, and Token Holders – to create an incentivized market for protocol security and responsible disclosure. It is DXdao’s first use of a bug reporting system.
Update: Hats now has 13 projects with Vaults on Hats Finance. HATS token doesn’t exist yet. DXdao is still planning to deposit into its Vault.

DXventures Update
Date: January 2022
Amount: 100,000 DAI Grant Investment
Forum: DXventures Opportunity: Provide investment grant and incubate Double
DXvote (mainnet): Proposal for Grant Investment from DXdao to D2 Labs, Inc. (“Double”)
DXvote (Gnosis Chain): Mirror Proposal of “Proposal for Grant Investment from DXdao to D2 Labs, Inc. (“Double”)” on Mainnet made by Double
Note: Double is building a decentralized co-op platform for AMM liquidity providing that will double LP investors’ return on invested capital while at the same time boost liquidity for projects’ tokens. This would tie in very well with DXdao’s product suite.
Update: Double audit was done and is completing its front-end. We are working with Double to discuss launch strategy and steps forward.

Atlantis World
Date: January 2022
Amount: 40,000 xDAI plus 10,000 Carrot tokens (with 10,000 wxDAI collateral) Grant
Forum: DXdao <> Atlantis World
DXvote (Gnosis Chain): Atlantis World Grant Proposal
Carrot token creation: Atlantis World Grant Proposal - Carrot Portion Creation
Carrot token send: Atlantis World Grant Proposal - Carrot Portion Delivery to Atlantis World
Note: Atlantis World is building the Web3 social metaverse by connecting Web3 with social, gaming and education in one lightweight virtual world that’s easily accessible.
Update: Atlantis World is live on some chain with some DApps embedded. The DXdao portion is there but is not finalized. When appropriate, we would organize a DXdao meet-up in AW.

Karma
Date: February 2022
Amount: 100,000 USDC Grant Investment
Forum: DXventures Grant Investment to Karma
DXvote (mainnet): Proposal for Grant Investment from DXdao to Karma Crypto, Inc
Karma’s announcement: Announcing Karma and funding round
Note: Karma is building a reputation system for DAO contributors aggregating all your DAO activity and helping you showcase your contributions and build up reputation.
Update: Site is coming along. DAOs are being onboarded. How DAOs can most effectively use it is being figured out.

Summary:
The total amount of outgoing grants has been $440,000.

DXventures attended the ETHVC track at ETHCC in the summer of 2021:​​ DXventures at ETHVC ‘21

During its time, DXventures has explored and shared numerous opportunities with DXdao. To date, some of these viewed opportunities have included:

September 2020: DeepDAO
August 2021: PrimeDAO
October 2021: Diamond DAO // Chainverse
October 2021: DXmetaverse
December 2021: EYWA
June 2022: DoinGud
Among others

Currently, DXventures is looking at: Nimi Incubation Grant - DXVentures

This idea of an incubation grant is a newer structure that will allow DXdao to explore how new products ideas can sprout and grow from within DXdao.

Over the time, we’ve explored and used many of the DAO tools that teams are building. We’ve also given lots of feedback to these teams as they progress.

DXventures has implemented a due diligence process for all warm opportunities.

For the past 5 months or so, it has become harder for DXventures to stand out as a support partner. Many projects have been receiving VC funding at quite favorable terms. This is ok for DXdao. If there is a tool that we need and it’s already got its own funding, we can still plan to use these products.

If anyone has any ideas for DXventures to explore or things that can be tweaked, please reach out or join the discussion.

Currently, the plan is to continue the path that DXventures is on. If there is a reason to change or tweak the path, the squad is open to productive discussion.

Thanks.

6 Likes

How does the $440,000 already allocated in grants and $150,000 being considered for Nimi compare to the overall DXdao runway? How much runway would be added without DXventures? Are any investments already made likely to deliver a return that would extend runway or increase treasury?

A separate discussion is being held about future of DXD and whether new limits should be placed on the buybacks to preserve treasury and runway.

I don’t mean to dismiss any ideas here, but if funds are not sufficient to maintain the buyback at the current rate (at a 70% discount to NAV); is it wise to be setting aside $150,000 to fund Nimi?

2 Likes

Hey – I might have a biased opinion as I’m one of the original hackers who hacked on Nimi at ETHAmsterdam.

I think there’s quite some excitement at DXdao around Nimi - after the hackathon there were even suggestions to immediately transfer the ENS and ownership of Nimi to the DAO and continue it’s development as a DXdao product.

If you’re looking at this purely from a runway perspective, if Nimi were a fully owned DXdao product, it would have a much more significant impact on budget / runway. New people would be on-boarded to work on Nimi at DXdao compensation levels, and the original hackers would keep their full DXdao salary while still building Nimi out. I think imposing a full DAO framework on a startup from the beginning can also be throttling and slow things down. Moreover, to scale quickly Nimi does take a few shortcuts when it comes to decentralization - which perhaps doesn’t fit into the DXdao ethos. Our priority is making it easy for web3 users to be on-boarded into Nimi.

On the other hand, the incubation grant goes down a different path. First of all, the four Nimi hackers interested on working on it further have expressed their interest to dedicate up to 2 days a week to Nimi - thereby cutting their DXdao compensation accordingly (which on the other hand increases runway). Moreover, as an early stage startup Nimi would not need to fit into the existing DAO framework, i.e. if Nimi wants to hire a developer or designer we don’t fall into the existing DXdao compensation guidelines (which Nimi currently can’t afford to pay), but have much more flexibility. A lot of our expected work is UI / UX and front-end related. Another important aspect, in my opinion, is that through the incubation grant Nimi will also have to stand on its own and build a product the market appreciates - otherwise it’ll be unable to raise further funds / grants. It’d also be much more difficult to raise external funds, particularly grants, if Nimi were a fully-owned DXdao product.

The other option ofc would be to completely abandon the project or let the Nimi team quit their DXdao positions and try to build it on their own. If you look at this purely from a runway perspective, this is probably the best option - no $150k incubation grant and 4 less contributors “draining the runway”. However, I’d like to believe the DAO wants to support new and cool projects – of course looking to also make a profit out of it – and can see the incubation grant style allowing both other contributors within DXdao and external teams to turn a side-project into a real product.

With all that said, if the Nimi Incubation Grant does go to a vote - I also ask all REP holders at DXdao to vote based on their belief of whether or not Nimi could be a successful project and not based on the fact that they might be befriended with myself or any of the other Nimi team members. I’d ask you to vote with DXdao’s best interest at mind.

4 Likes

I think Nimi is a really cool product and actually probably the most ‘fitting’ recipient of a grant under this program. Not going to lie the tangent into Metaverse/gaming seemed a bit of a stretch away from DXdao’s core activities related to governance & decentralization, but I hope I can be proven wrong and I guess some allowances for being swept up in the height of a bull market is expected.

I understand @0xSpicySoup 's point on resource allocation and agree that return on dollars is paramount - however, I could be misreading the situation here, but I think this issue might come down to the use of the word ‘grant’ and its connotations. It’s easy to interpret this as a donation, whereas I kind of see it as an early stage VC investment, but with more flexibility (I could also be totally wrong here; if so, someone please correct me). I’d expect any project that received one of these grants to look to return tangible value to DXdao in future (usually through a generous, preferential token allocation, or some fee sharing, etc), and I’d hope that this is implicit within the grant, but it may not be appropriate to act as a traditional VC with contractual obligations, hard deadlines, etc.

Maybe some more clarity on the value-returning mechanism (if the intention is to have one) might help both sides reach common ground. New Order DAO is a DAO that incubates DeFi projects in a similar manner, and their recent proposal to incubate Y2K Finance included this detail upfront (10% of the terminal token supply), so stakeholders in the incubating DAO, New Order, knew the value they’d be receiving upfront when voting whether to pass the proposal and part with both monetary and talent resources. Therefore, there’s much less scope for it to be seen as a donation.

6 Likes

Good question.

There has been no monetary realized return from any of the project DXdao has supported so far. There may have been other harder to measure non-financial returns.

Overall, I think the grant investments that DXdao has made into projects have been a good piece of DXdao’s ecosystem.

I have even received feedback from some community members who believe that DXdao may be better at supporting teams building products than building products itself. Might be an idea worth exploring further?

Looking towards the future, there is some chance that DXdao could benefit greatly from some of the projects that it supports.

One could even argue that dedicating more resources toward DXventures and getting better at supporting and incubating more projects could put DXdao in a better position in the future.

3 Likes

This seems like a reasonable expectation to me.

Thanks Sky

Is there any documentation on criteria DXventures proposals must meet?

I wouldn’t be hugely concerned that previous projects support by DXventures have yet to realize a return for DXdao. Completely reasonable that these allocations should be with a long-term view and needn’t deliver immediate return.

But I’d hope that it’s a firm requirement either that there is a clear well-communicated plan for eventually delivery a return at some stage in the future, or that projects present an high level of value add for DXdao ecosystem.

2 Likes

We do have a DXventures Due Diligence Checklist that we’ve been using on the Squad to help with screening.

There is then a questions and discussion period, which then leads to public posting and open discussion.

In practice, there likely needs to be a “champion” to support an opportunity for DXdao. Really, nothing can get through DXdao governance without some “champion” of the idea.