Pantera Capital Partner: A Detailed Explanation of Web3 Financial Management Tool Multis

Author: Paul Veradittakit, Partner at Pantera Capital

Original Title: “Web3 OS”

Translation: MK, Chain Catcher

Introduction

Web3-native businesses such as DAOs are launching and growing at an unprecedented pace. By 2021, the total assets under management of DAOs grew 40 times, peaking at $16 billion by the end of the year, while DAO membership increased from 13,000 to nearly 1.6 million participants.

Despite the increasing popularity of Web3 business models, most enterprises have poor processes and infrastructure for handling finances. Tasks like payroll, tax reporting, and transaction tracking are often managed through uncomfortable solutions like Excel spreadsheets, which become error-prone and unsustainable as the scale and complexity of businesses grow.

Multis is a new crypto asset management platform designed specifically for Web3 businesses and DAOs. Within two weeks of launching, over 300 organizations set up Multis accounts, including Compound Labs, The Sandbox, and Teller Finance. The project has raised $7 million in funding from prominent investors such as Sequoia Capital, Y Combinator, MakerDAO, Ryan Selkis, Jack Altman, and several other well-known Web2 and Web3 investors.

Multis is built on Gnosis Safe—a powerful smart contract wallet that features multi-signature transactions, the security of hardware wallets, and native integration with DeFi protocols. Gnosis has become the industry standard for how crypto organizations hold their assets, with over $86 billion in digital assets held in Gnosis Safe.

Multis integrates with enterprises' Gnosis Safe and provides teams with greater visibility and control over their finances through the following features:

• Monitor assets, cash inflows and outflows, and display balance history across different wallets on various blockchains for businesses.
• Analyze transactions with custom notes and tags, enabling teams to easily search and filter their transaction history.
• Simplify accounting by allowing teams to export transaction history as comma-separated values or directly import transactions into QuickBooks.
• Collaborate with other team members by setting up real-time notifications for transactions in Multis or sharing transaction data with external accountants who have fine-grained permissions.
• Set up automated workflows and payments for core business functions to streamline processes like payroll and reporting.

The Multis team is currently developing more features to simplify the financial operations of Web3 businesses, especially around the transitional phase between cryptocurrencies and fiat currencies. Soon, Multis will allow businesses to easily integrate their wallets with USD checking accounts through partnerships with FDIC-insured banks and issue debit cards with custom controls for their employees.

In summary, by minimizing the overhead of managing finances, Multis enables Web3 businesses to utilize their capital more securely, transparently, and efficiently than ever before, allowing these organizations to sustain growth and focus on their core vision rather than operational details.

The Rise of Web3-Native Businesses

With the increasing popularity of crypto and DeFi, Web3-native businesses—especially DAOs—are launching and growing at an unprecedented pace. In 2021, the current most popular DAO analytics site, DeepDAO, reported that assets under management (AUM) by DAOs grew 40 times, from $400 million in January to over $16 billion in December; by the end of the year, DAO membership also increased from 13,000 to nearly 1.6 million. More and more organizations are opting for decentralized governance instead of corporate bureaucracy and bank-custodied assets like token-based treasuries.

Despite the growing momentum around Web3-native businesses, there is still a severe lack of tools for these organizations to manage their finances. Many of these organizations still use fragile tools like Excel spreadsheets or uncomfortable internally built software for managing finances, tracking cash flow, and generating tax reports. These solutions are prone to errors, susceptible to misuse of funds, and require significant operational overhead, making them unsustainable for businesses with large user bases and substantial AUM. For DAOs and other Web3-native businesses to thrive and grow sustainably, they need a richer and more robust software layer to manage their finances.

What is Multis?

Multis is a new crypto asset management platform designed specifically for Web3 businesses and DAOs. The platform allows organizations to manage crypto assets across different wallets and blockchains, significantly simplifying the complexities of crypto accounting and enabling teams to gain deeper insights into their spending and cash flow than ever before.

The project has raised $7 million in funding from Sequoia Capital, Y Combinator, MakerDAO, Ryan Selkis, Jack Altman, and several other prominent investors from Web2 and Web3.

How Does Multis Work?

Multis is built on Gnosis Safe, which is currently the standard for Web3 businesses controlling funds. Gnosis is a very powerful smart contract wallet that allows businesses to easily implement multi-party control of funds, enhance security through hardware wallets, and integrate seamlessly with DeFi protocols. To date, companies like ENS, ConsenSys, Aave, and SushiSwap hold over $86 billion in digital assets on Gnosis Safe.

Multis can integrate with a business's existing Gnosis wallet or help them create new wallets to store their funds. From there, Multis provides its users with greater visibility and control over their crypto finances through the following features:

• Monitoring: Users can easily view assets, inflows and outflows, gains and losses, and balance history across multiple wallets on Ethereum, Bitcoin, Binance Smart Chain, and Polygon.
• Transaction Analysis: Users can annotate transactions in their different wallets using custom notes, spending categories, and invoice attachments. They can also search and filter their transactions by wallet, category, blockchain, sender, or recipient.
• Accounting: Users can export their complete transaction history in comma-separated value format or directly import transactions into QuickBooks through Multis's integration (in beta). Businesses can also assign admin or read-only permissions for transaction history to their accounting teams.
• Collaboration: Users can invite assistants and external accountants with different permissions to view transaction history and wallets. Real-time notifications can also be enabled for transactions that may require approval, such as transactions from multi-signature wallets. Teams can also set up workflows to issue bulk payments to up to 60 Ethereum addresses, streamlining financial processes.

Example of Multis Data

What’s Next for the Project?

In just two weeks after the public launch of Multis, over 300 Web3 businesses have created accounts on the Multis platform. These include Compound Finance (a lending market), The Sandbox (a gaming platform), and Teller Finance (a non-collateralized lending protocol); executives from all these companies have praised how Multis simplifies their financial operations.

As Multis brings more Web3 businesses onto their platform, the team is building additional workflows to help simplify crypto asset management—especially around the easy transition between cryptocurrencies and fiat currencies. For example, Multis will soon allow businesses to easily transition from cryptocurrency to USD checking accounts through partnerships with banks insured by the Federal Deposit Insurance Corporation and issue debit cards with custom controls, enabling team members to responsibly spend USD from the company's crypto balance.

Final Thoughts

DAOs and other Web3-native businesses are pushing the boundaries of how organizations control and utilize their capital. Unfortunately, as these businesses scale and grow in complexity, the vast majority of tools for managing finances remain immature, difficult to maintain, and unable to scale. As Compound Labs CEO Robert Leshner said, "The operational headaches of crypto businesses are an unspoken burden for DeFi entrepreneurs."

Multis makes it easier than ever for Web3 businesses to have a comprehensive and detailed understanding and control over their financial situation. The platform greatly expands the capabilities of Gnosis Safe, enabling teams to easily track balances across wallets and blockchains, record and annotate transaction histories, and streamline and collaborate on central accounting workflows. Soon, Multis will further enhance the capabilities of Web3 businesses, allowing them to easily integrate with USD checking accounts, enable debit cards for team members, wire funds to partners, and more. Ultimately, it aims to minimize the overhead of managing finances. Multis enables Web3 businesses to utilize their funds more securely, transparently, and efficiently than ever before, allowing these enterprises to grow sustainably and focus on their core vision rather than operational details.