Idea for discussion: DXventures

Idea for discussion: DXventures

Background

DXdao is a decentralized collective that builds and governs decentralized products and services for the world. In this process, DXdao strives to use unstoppable, decentralized technologies that allow it to operate and govern while maintaining its core values.

During this journey, DXdao often encounters situations where the tool or service needed may not exist. In this scenario, DXdao is often exploring what is possible, what can be built, and who can build it. Sometimes, DXdao is able to fill the need itself, and other times, DXdao hires someone to build what is needed. And finally, there are times when these needs remain unsolved.

For this reason, DXdao is always looking for projects and teams that are building products that fill these needs and will be important in a decentralized world.

Today, DXdao has the opportunity to accelerate the work being done in this field, and would like to present the idea of DXventures.

Introduction of DXventures

DXventures is a focused, internal investment fund to seek out and 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. If we believe that the future will be full of these types of organizations, then we probably also believe that teams building solutions to these problems are also likely good investments.

Why DXventures is important for DXdao

For the past couple months, the DXdao community has been actively discussing the topic of “How does DXdao collaborate, incubate and partner with entrepreneurs, projects and communities?” often as part of the DXbiz Weekly Meeting and in discussion channels.

DXdao is already having conversations with a few projects about funding needs to accelerate the progress of those projects.

DXventures is a way to formally establish a program within DXdao to pursue these opportunities.

DXventures will also be a beneficial addition to DXdao’s use of its treasury, becoming a key part of its diversified holdings.

DXventures is also a great way to create deal flow for Mesa and Swapr. You can image a clear path for ideas to become revenue generating entities:

  • Pain point for decentralized org

  • Team with idea to solve pain point

  • DXventures provides seed funding for team to build out idea

  • DXdao incubates

  • Solution gains traction (and is used by DXdao)

  • IDO on Mesa for token sale

  • Swapr liquidity for secondary trading

  • Further relationship with project

Proposed Structure for DXventures

This post proposes an initial structure for DXventures.

DXdao would commit and earmark $1m of the treasury to be used for DXventures.

DXdao would seek out opportunities to invest up to $100k each in projects seeking seed or growth capital.

DXdao would remain flexible when it comes to the terms and structure of these investments. If the project has a token, there could be a funding-for-tokens exchange. If no token exists, there could be an on-chain agreement.

To help mitigate risks, a staged funding ladder where the investment happens in stages could be implemented.

DXdao exists as a global on-chain collective, and new ways of interacting and investing in organizations will likely have to be created.

Opportunities for DXventures

Question: What types of projects will DXventures be looking to invest in?

Answer: Projects that are creating things that DXdao needs!

Examples:

  • Decentralized Medium
  • Decentralized payroll
  • Decentralized key management
  • Decentralized node operation
  • Decentralized repository
  • Decentralized code collaboration
  • Decentralized …
  • Other (probably decentralized) cool ideas!

Next Steps

  1. Community discussion, improvements and feedback around idea

  2. Refine Proposal

  3. On-chain Proposal

If passes:

  1. Launch DXventures to the world

  2. Launch with a couple initial investments

8 Likes

I don’t have much to add other than I fully stand behind this initiative.

Investing in projects that directly solve problems the Dao faces is an incredible idea.

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Follow-up related to DXventures

Over the past three weeks there has been ongoing discussions and general support of the DXventures initiative from the community with no notable objections.

During this period, we have also had a proposal to authorize and fund xDai base for DXdao. ([Proposal] Authorize and fund xDai base)

xDXdao on xDai can now be used to “Vote on signal proposals related to DXdao governance”
(Alchemy | DAOstack)

There has also been increasing discussions around different investment opportunities DXdao currently has in the pipeline, and also around the mechanics of how these deals could be structured/completed.

The next step is to raise a Signal Proposal on xDXdao for DXdao community to vote on the DXventures initiative.

As of now, it looks like each individual opportunity/investment will likely require two additional proposals:

  1. After community discussion around an opportunity, and a general soft consensus to move forward, there should be an internal Proposal for member to vote on that specific opportunity.

  2. The second proposal would then be a Proposal submitted by the Project receiving the investment (with the help of DXdao contributors) including the terms of the deal and the commitment from each side.

The process will likely evolve as we progress down this path.

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Update:

A detailed “Signal Proposal: Support for DXventures” was passed in March 2021.

Since then, a few different opportunities have come across DXventure’s plate which have been discussed on multiple BizDev calls including presentations by the projects.

This week, a group of community members interested in DXventures met to discuss opportunities, process, and conclusions.

Here are some take-aways from the discussion:

  • Timing matters - getting in earlier with projects that DXdao sees a need for is better than joining later rounds.
  • Grants - One path is that this could start with grants (like in Almonit’s case) and then potentially move into investment area
  • Need - Products that already are progressing and can be used by DXdao for free might not need investment from DXdao
  • Leader required - For an investment to move forward, there should very likely be a community member who is 100% spearheading this. This person is what would move the opportunity through the process. (Maybe this person should eventually be rewarded if successful)
  • Memo - The opportunity should be presented in the form of an “Investment Opportunity Memo”
  • Patience - Ok to wait for the “Hell Yes” opportunities. Many "No"s are ok.
  • Clear - Value prop and investment economics should be easy for most to understand
  • Scouts - Important for community to keep an eye out for the “Hell yeah” opportunities

If you have any more suggestions/improvement to the process, please add.

Also, if you have any opportunities, please share.

4 Likes

This will age well! :seedling: :deciduous_tree:

1 Like