A new for-profit decentralized autonomous organization (DAO) has arrived in the Ethereum ecosystem, and it’s striving for nothing short of fostering a “permissionless Silicon Valley.”
The effort, known as The LAO, is a venture DAO underpinned by a Delaware-based limited liability company. On the Ethereum side, The LAO’s smart contracts are based on MolochDAO’s upgraded v2 contracts, which allow users to pool and manage invested ether (ETH). The LLC addition thus ensures accredited investors in the U.S. can compliantly participate.
The project’s memberships, which are tentatively limited to 100, officially opened on Tuesday, April 28th. In an introductory post on the launch, OpenLaw, the creators of The LAO, said:
“With The LAO we’re taking the first steps to enable people from around the globe to support projects that they love using the power of capitalism as an incentive … The LAO is just the beginning. We’re aiming to build an ecosystem of DAOs to rebuild Silicon Valley in the sky, one DAO at a time. In the end, we hope to have a permissionless ecosystem that directs funding to entrepreneurs regardless of their location, background, or creed.”
Venture Capitalism, Cryptonative Style
The LAO joins the recently launched MetaCartel Ventures in being the two most significant for-profit DAO efforts since the rise and ensuing hack of “The DAO,” the first decentralized venture fund, in 2016.
That infamous episode set Ethereum’s DAO scene back a few years, but the leading smart contract platform’s ecosystem has advanced in leaps and bounds since then, and the fresh advent of project’s like The LAO and MetaCartel Ventures shows that it’s the future, not the past, that will define the venture DAO space going forward.
And it’s not just that these projects are the first notable oncomers through the doorway in the wake of The DAO hack. They’re also very notable for the way they are approaching their operations, namely in using cryptonative solutions to novel ends. As OpenLaw explained on Tuesday:
“We believe the future holds out a financial world supported by a constellation of loosely connected DAOs that rely on the same common core: Ethereum, OpenLaw, and oracle providers like ChainLink (what we’ve previously described as the OLE stack).”
On the Launch
Entrants to The LAO will be granted on a “first-come-first-serve basis.” Investors can purchase 1% blocks of the organization’s voting rights in exchange for 120 ETH (nearly $24,000 USD at the time of writing).
However, investments will be capped at 1,080 ETH per user, meaning no single investor will be able to have more than 9% of The LAO’s voting rights.
For accredited investors who take the leap on joining the novel organization, a “14 day processing period” encompassing a weeklong vote-in window and then another week-long “rage quit” grace period will take place before membership is finalized.
Off to a Hot Start
Before 24 hours had passed from the opening of The LAO, the venture DAO’s pool had already accrued 2,520 ETH, or roughly $500,000.
That rapid support means the group already has a notable war chest via which it can start to invest in promising projects around the wider Ethereum ecosystem.
The LAO has been accepting applications from prospective LAO-funded efforts for weeks now, too, so the first fundings are likely just around the corner now. As OpenLaw noted of their process earlier this month:
“If a LAO member is interested in your project, he or she can put the project up for consideration by all of The LAO members. If approved by a majority vote, the sponsored project will be notified and become a LAO company that will receive funding in the form of a convertible note or a seed-stage type of investment.”