Interpretation of ai16z launch platform daos.fun: Will it become the next liquidity black hole?

Original title: "Daos.fun: The Next Liquidity Black Hole?"

Original author: Karen, Foresight News

Last weekend, in addition to BAN, which was supported by Michael Bouhanna, vice president of Sotheby's, ai16z also attracted a lot of attention with its outstanding performance. Its market value once approached the $100 million mark and has now fallen back to around $46 million.

Someone spent only 20 SOL (about $3,500) to buy 47.54 million ai16z three days ago, which is currently worth $2.3 million, with a return rate of 650 times.

So what exactly is ai16z? How does its launch platform daos.fun work? What are the characteristics and risks?

What is daos.fun? How does it work?

daos.fun is a platform founded by @baoskee and supported by Alliance DAO. The main function of this platform is to help fund managers and creators raise funds so that they can set up their own DAOs and invest in Memes on behalf of token holders.

Currently, daos.fun is still in the invitation-only stage, and only creators who have obtained official or @baoskee invitation codes can participate.

Once you become a creator of daos.fun, you need to set the fundraising target amount, fund expiration time, and management fees, and then you will have one week to raise the required amount of SOL. The tokens of each DAO will be issued in a fair manner to ensure that everyone can get tokens at the same price at the beginning. If the fundraising fails, the purchaser has the right to redeem the SOL, and early redemption will incur a 10% loss.

When the fundraising reaches the preset hard cap, the creators will invest the raised SOL in their favorite Solana protocol or Meme, and the token will also be publicly traded through the virtual AMM market. In this way, the market value and price of the DAO token will fluctuate with the fund's trading activities and performance, and of course, market attention also accounts for a very large proportion.

In principle, the price of the DAO token has unlimited upside, but its downside is limited by the fundraising market value. As long as the market value of the token exceeds the original fundraising amount, the holder can sell the DAO token at any time.

All DAOs expire between 3 months and 1 year. After the fund expires, the DAO wallet will be frozen and the SOL profits will be distributed to creators and investors in proportion. Token holders can choose to destroy DAO tokens to redeem the underlying assets, or sell them directly on the market (provided that the market value is higher than the fundraising amount).

Ai16z: The AI DAO with the largest market value on daos.fun

As mentioned above, the most successful DAO fund on the daos.fun platform is undoubtedly the ai16z fund founded by @pmairca (Marc AIndreessen). Ai16z started with an initial fundraising amount of 420.69 SOL. With the help of a16z founder Marc Andreessen's two mentions on the official Twitter, its market value was the largest, once approaching $100 million. Although it has fallen back, it is still stable at around $45 million.

The top 10 DAOs by market value on daos.fun

Marc AIndreessen once pointed out, "We are in the midst of a revolutionary change. The deep integration of AI and blockchain technology will reshape the landscape of finance and innovation. In this transformation process, AI16z, a pioneer of AI DAO, is playing a leading role. It depicts a future vision in which AI agents are the core driving force for value creation and growth. In the initial stage, ai16z will operate in a highly autonomous manner under the guidance of the collective wisdom of stakeholders. Its long-term goal is to achieve full chain-on-chain and place AI entities under the strict protection of a trusted execution environment (TEE) to ensure unprecedented transparency, security and integrity."

ai16z not only actively listens to the insights and suggestions of the community, but is also committed to learning and growing from them. DAO holders have the opportunity to make comments on investment decisions in Discord, and the AI system will closely track the implementation of these suggestions. Individuals who continue to contribute reliable insights will win the trust and confidence of AI, while the influence of those whose suggestions are ineffective will gradually weaken. To maintain a balanced distribution of power, the input weight of each member will be proportional to the proportion of their shareholding in the DAO, thereby effectively preventing potential threats to the system from malicious actors. In the future envisioned by ai16z, all those who empower and add value to the network will be fairly rewarded.

The official page of ai16z also shows that ai16z will also invest in seed-stage AI companies in the fields of robotics, bio + healthcare automation, consumer manipulation, crypto anarchy, enterprise obsolescence, fintech disruption, game theory development, infrastructure hijacking, etc. ai16z's technical battle has been open sourced on Github.

It is worth mentioning that kotopia is the DAO that raised the most funds on daos.fun, raising nearly 4,207 SOL (worth $740,000) and a current market value of $810,000.

What are the characteristics and risks of daos.fun?

So, what are the characteristics and potential risks of daos.fun?

daos.fun has lowered the threshold for operating Meme funds. If daos.fun opens up registration for creators, in theory anyone can initiate Meme DAO or Meme VC, and some KOLs and institutions may also issue coins through daos.fun in the future. In the current context where AI Meme is extremely popular but most retail investors find it difficult to grasp its rhythm, daos.fun has undoubtedly opened up new possibilities for retail investors.

Openness and transparency are also a major feature of daos.fun. First of all, the asset management of each DAO is publicly displayed on the daos.fun page, and secondly, the profit sharing mechanism is relatively transparent. In addition, all DAO creators have linked their own Twitter accounts, which usually means that they value their reputation. But who knows?

Daos.fun's profit points mainly lie in DAO tokens and fund investment performance. However, this profit model is also accompanied by risks that cannot be ignored, especially the improper behaviors such as rat trading that fund managers may take. More importantly, the serious deviation between the market value of the fund and its net asset value has become another potential risk point.

Taking ai16z, the largest token on daos.fun, as an example, its market value to net asset value ratio is as high as 58. The second-largest token by market value, SEQUOAI (market value of $455,000), also has a ratio of 40, while the third-largest token by market value, NORM, has a ratio of 29. The high ratios of these funds undoubtedly reveal the strong atmosphere of speculation and hype in the current market, as well as investors' extremely high expectations for the future performance of these funds. However, this also reminds us that while pursuing high returns, we must be wary of potential market fluctuations and risks.

As early as 2022, the concept and implementation of Ventures DAO had already appeared in the Web3 field, but no significant progress was made at the time. This time, with the rise of the Meme craze, whether the Meme DAO Fund, AI DAO Fund, etc. can set off a craze, Foresight News will continue to pay attention.

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