Venture capital is the latest industry to get a taste of decentralized governance. Peter Yuan Pan announced the launch of MetaCartel Ventures, a decentralized autonomous organization that will invest in the Ethereum ecosystem.
DAO as a Community of Investors
In true crypto spirit, the MetaCartel community is difficult to trace. What began as a project focused on meta transaction technologies within the blockchain space has now evolved into a funding engine for Ethereum-based dApps. These first steps manifested in the first fork of another DAO experiment called Moloch DAO.
Both Moloch and MetaCartel are experiments in using crypto-native business models to provide grants for projects in the ecosystem.
Since February 2019, Moloch has granted over $120,000 in resources to 17 different projects. MetaCartel has done much of the same since launching in July 2019. Grants have supported blockchain-based conference ticketing, coordinating meetups, DeFi business models for dApps, and several other initiatives.
In the latest experiment, MetaCartel has launched MetaCartelVentures (MCV), “a for-profit investment DAO coupled with a legal entity.”
— 👹 Moloch (@MolochDAO) December 15, 2019
MCV combines an instance based on Moloch’s v2 smart contract standard with a Delaware-based LLC. This LLC is governed by both the Limited Liability Company Agreement and the Delaware Liability Company Act. The reasons Delaware was chosen is three-fold:
- As many members of the DAO are U.S.-based, the project must abide by my American regulations.
- The state has some of the most amenable corporate laws and hosts a majority of Fortune 500 companies.
- The flexibility the Delaware courts have offered LLCs matches closely with the DAOs driving ideology.
It is easier to understand the legal aspects of the venture by looking at traditional partnership agreements found in multi-member LLCs. Given that DAOs are instantiated through their…