A Fresh Look At DAOs – The New (Digital) Family Offices - GCR

Private token sales with long-term vesting schedules: DAOs can raise cash by entering long-term partnerships with investors such as VCs or angel investors exchanging native tokens for a fixed price for cash following a long-term vesting schedule. Similarly, a DAO could raise cash from its community members following similar deals.

Outline the dilemma that DAOs face today: one the one hand, DAOs need to diversify their treasuries away from their native token concentration; on the other hand, they can’t simply sell their native tokens on the open market without moving the market or cause any negative perception by market participants or its community members. We will discuss s... See more

At the same time, however, native tokens are exposed to general market volatilities and are not immune to strong sell-offs during bear markets. It is in such circumstances that the daily operations and functionality of a DAO can be disrupted due to the lack of cash reserves for its regular funding. Partially compensating a core group of team member... See more

Selling native tokens against stable coins, however, is easier said than done. The dilemma that DAOs face is that the markets may fail to smoothly absorb the supply of native tokens due to the lack of liquidity leading to a sharp drop in its price.