The blockchain-based investment protocol syndicate claims that 10% of all decentralized autonomous organizations (DAOs) that exist have been created on the platform in less than three weeks’ work.
Syndicate is a DAO creation platform that has attracted funding from, among others, A13Z and Coinbase Ventures. The team talked about the development in a tweet dated 15 February.
Syndicate co-founder Will Paperer explained today that the project has created 450 investment clubs as DAOs, just over 10% of the “best estimates” of the existing 4,227 DAOs based on DeepDAO measurements and figures released by Forbes.
DeepDAO is an analysis tool that keeps track of decentralized organizations.
The rapid influx of new organizations into the syndicate indicates that the DAO governance structure has gained popularity since its mainstream adoption of cryptocurrencies just two years ago. Currently, the two most important DAOs are BitDAO (BIT) and Uniswap (UNI). Uniswap DAO was created in 2020 and BitDAO in 2021. They now manage $ 4.4 billion in treasury funds.
This week, the Republic of Marshall Islands became the first sovereign nation to formally recognize the DAO as a legal entity.
The syndicate’s stated goal is to democratize investments by allowing groups to create decentralized investment structures. It automates the process on the chain, so anyone can set up a DAO and invest in less than a minute for just the cost of gas. DAOs can also include compliance tools to keep things in line with the rules.
Baber said that the team views DAO as “one of the most powerful coordination structures we have ever seen”, and that their use in corporate and club management will become more widespread over time.
However, Baber said that when an organization decides to use a decentralized method of coordinating efforts, there are trade-offs to be made.
“Everyone who manages a DAO knows that it is much less efficient than traditional companies or other organizations. However, this trade-off in efficiency is worth the extra flexibility.”
Although there are inherent benefits to coordinating in DAOs, Papper added that there are still flaws in their mechanics that need to be ironed out:
“For DAOs to emerge in other areas, they must become more effective in their day-to-day decision-making. There are compelling innovations in subDAO and governance model management, but they still need more time to fully manifest.”
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The syndicate team did not provide a list of devices created with the platform, saying: “We do not store information about our users because everything runs on smart contracts that are decentralized and protect their privacy.” However, Baber said the information about the network could be verified.