Understanding DAO Investment Tools in One Article: Web3 Investment Clubs on the Syndicate Protocol

Written by: Syndicate

Compiled by: TechFlow

We are excited to introduce Web3 Investment Clubs, built on the Syndicate protocol, which is the first mainstream crypto-native social investment tool based on the Syndicate protocol. Today, it launched its public beta. It can transform any Ethereum wallet into a powerful investment DAO in seconds, with only mining fees required. Click here to join.

The birth of Web3 Investment Clubs makes investing easier. Friends, angel investors, and communities on web3 can now create and run a DAO-style investment club as easily as setting up a group chat on messaging apps. Web3 Investment Clubs based on the Syndicate protocol support investments in tokens, NFTs, as well as startups and assets outside the blockchain, can associate with legal entities, open bank accounts, and issue K-1s. It is built on the ERC-20 infrastructure, making it a ready-to-use product that can integrate with any DAO and web3 tools (such as Gnosis, Snapshot, etc.).

For a long time, powerful tools supporting multi-party investments had a cost barrier, accessible only to those who could afford expensive SaaS and service providers. But now this barrier has been broken, and almost anyone can launch and run a DAO-style investment club through the Syndicate protocol. Compared to existing investment tools based on TradFi and web2 platforms, the time and cost have been reduced by 100 times.

Our mission is to fundamentally transform investing through convenient, easy, and social web3 technology, and Web3 Investment Clubs are just the first step in achieving that mission. Organizations like South Park Commons-Script founders, Global Coin Research (GCR), Chapter One, DAO Jones, Awesome People DAO (Julia Lipton), Vector DAO, The Council DAO, Eve, Morii Music DAO, Chad Capital, We3 DAO, SLCF (SuperLayer-Chainforest), Women in VC DAO, Forefront, and others are also launching investment clubs based on the Syndicate protocol.

And this is just the beginning.

Traditional Investment Clubs

Investment clubs have a history of thousands of years, but the first formally recorded investment club was established in 1898 during the Wild West period in Texas.

The first investment club probably looked something like this

Investment clubs are groups of multiple individuals who pool funds for joint investments, share ideas, and achieve common learning, increase purchasing power, share risks, and reduce transaction costs. Investment clubs invest in stocks, bonds, real estate, art, and collectibles, while contemporary investment clubs also invest in startups, tokens, and NFTs.

Since investment clubs are member-oriented, almost any social group can create one. Under certain rules, investment clubs are typically not regulated by the U.S. Securities and Exchange Commission (for example, a membership cap of 99 people, invitation-only, no fees, and requiring everyone to participate in investment decisions, among other requirements mentioned in our Gitbook overview).

Historically, members of investment clubs enjoyed sharing, discussing, and investing together in person. However, from 1898 to the present is a long time, and many circumstances have changed; people now organize and collaborate online. Today's investment clubs should be more internet-native, but unfortunately, the reality is not so, and there are still many challenges, including:

• Slow, difficult, and costly to create and operate investment clubs;
• Difficulty in maintaining compliance with laws and regulations;
• Lack of modern, internet-native tools for jointly investing in internet-native assets;

However, with the advent of the Syndicate protocol, teams can easily create and run an investment club online, based on the full functionality and compatibility of web3.

Web3 Investment Clubs

The Web3 Investment Clubs on the Syndicate protocol provide a tool for friends, angel investors, and the web3 community to initiate and operate DAO-style, internet-native investment clubs.

Web3 Investment Clubs on the Syndicate protocol

Here are many benefits of running an investment club on the Syndicate protocol:

1) Web3 Native: It runs natively on the internet through the Syndicate protocol on Ethereum (other blockchains will be launched soon).

2) Transform any wallet into a DAO: You can create and run an investment club using your favorite Ethereum wallet (such as MetaMask, Ledger, Gnosis, etc.).

3) 100x improvement, faster, simpler, cheaper: You can create a blockchain investment club in seconds, with only mining fees required.

4) Invest in cryptocurrencies and real-world assets: It can be used to invest in tokens, NFTs, and also (through legal entities) in startups and real-world assets.

5) On-chain portfolio and capital table management: It features a real-time dashboard for managing investments (such as tokens, collectibles, startups) and club members.

6) Composability: Each club is built on the ERC-20 infrastructure, fully compatible with the entire ecosystem of future Syndicate protocol tools, DAOs, and web3 tools.

7) Legal infrastructure: You can obtain DAO legal entities, DAO legal documents, EIN, bank accounts, K-1 tax forms, etc., from our friends at doola.

More content will be launched soon…

Next, let's take a closer look at some of the most exciting features of Web3 Investment Clubs based on the Syndicate protocol.

1. Powerful Investment DAO with a Click

In just a few seconds of clicking, you can transform any wallet (like MetaMask, Ledger, Gnosis) into a powerful investment DAO, with only mining fees required. The Syndicate protocol gives wallets new web3 investment superpowers, including on-chain deposit management, cap tables (i.e., mirrortables), governance tokens (i.e., mirrorshares), portfolio dashboards, and more.

DAO dashboard of investment clubs on the Syndicate protocol

We are also pleased to announce that we have partnered with our friends at doola. This collaboration enables investment DAOs on the Syndicate protocol to obtain legal entities, open fiat bank accounts, submit national compliance filings, and easily and economically issue K-1 tax forms. It changes the game, but it is just the beginning of our joint efforts to bring deeper integration and capabilities to DAOs on the Syndicate protocol.

2. DAO Deposit Links, Mirrortables, and Mirrorshares

If a member forgets to manually track DAO deposits and cap tables through surveys and spreadsheets, the Syndicate protocol will automatically generate a deposit link and send it to them. When someone contributes capital, the web3 investment club will automatically update their on-chain cap table (i.e., "mirrortable") and issue the corresponding amount of ERC-20 "mirrorshares" (by default, non-transferable) to each member, as envisioned in a recent article by Balaji.

ERC-20-based mirrortables and mirrorshares in investment clubs on the Syndicate protocol

The mirrortables and mirrorshares of various web3 investment clubs are built on the ERC-20 infrastructure, allowing them to be fully compatible with any DAO or web3 tools (such as Snapshot, Gnosis, Coidinape, and Guild) for on-chain governance, automatic distribution and airdrops, contributor recognition, token thresholds, and more.

3. DAO Legal Document Generation and Web3 Signing

Manually tracking DAO legal documents is even more challenging than manually tracking DAO deposits and cap tables, as it involves creating, customizing, sending, and collecting signed copies of members joining the DAO.

The Syndicate protocol simplifies all of this. You can generate, send, and collect signed copies through the Syndicate protocol's web application. Moreover, all of this is done in a web3-native manner. It does not use centralized servers, so no content (such as documents, PII, data, etc.) is stored on any centralized server, providing users with maximum privacy, security, and control. We have the globally leading law firm Latham & Watkins providing us with legal advice to help create multiple standardized legal documents for Web3 investment clubs based on the Syndicate protocol.

We are creating web3-native tools that can handle heavy workloads, reducing your workload.

DAO legal document generation and web3 signing tools on the Syndicate protocol

4. Real-time Investment Dashboard on the Blockchain

Web3 investment clubs based on the Syndicate protocol feature a real-time dashboard that allows users to intuitively see token and NFT investments on Ethereum (with more blockchains to be added in the future).

These investment dashboards are available for all club members to view at any time.

The DAO dashboard of Syndicate shows real-time token and NFT investment status

5. Off-chain Investment Memos and Metadata

With the Syndicate protocol, you can also record investments in off-chain assets (such as equity in startups, SAFEs, convertible notes, etc.) and attach off-chain memos, metadata, and links to display on the investment club's dashboard. This makes the Syndicate protocol a powerful tool that is applicable not only for on-chain token and NFT investments but also for off-chain angel investments, venture capital investments in pre-IPO companies, and startups.

This tool was designed in collaboration with friends from IDEO CoLab Ventures, Electric Capital, Delphi Digital, Variant, CoinFund, and other web3 investors. We are building many web3-native tools that enable DAOs to connect with the off-chain world, and this tool is just one of them.

Off-chain investment memos can be added and displayed on the DAO dashboard of the Syndicate protocol

The Transformation Has Begun

In the coming weeks and months, we will add a series of powerful new features, capabilities, and integrations for our Web3 investment clubs in areas such as community building and management, community governance and voting, reporting and taxation, social networking, incentives, and economic collaboration. This will be our first product and initial feature set. We are just getting started, and many features are still in development.

The future of investing will be decentralized, democratized, and community-oriented. This transformation will stem from web3 and the investment clubs launched today on the Syndicate protocol.

Join us in this revolution! We will all succeed (original text: "Wagmi").