Emerging Fund Model Sparks Follow: Can Investment DAO Become the Next Billion-Dollar Market?

Recently, with the popularity of AI16z and its fundraising platform daos.fun, the concept of Investment DAO has once again attracted market attention. In short, Investment DAO is a decentralized hedge fund managed by humans or AI, which operates by raising funds, generating returns, and distributing profits to token holders. It can be seen as an innovative tool to help hedge fund managers raise capital.

In fact, Investment DAO is not a completely new concept. It has existed as one of the branches since the rise of the DAO concept in 2022, primarily deployed on Ethereum, with investment directions focused on popular areas at the time such as NFTs, DApps, and DeFi. In the current cycle, AI Agents and Memes have become the mainstream of investment.

Currently, this trend has gradually shifted from Solana to the Base public chain. This article will focus on two representative projects on Base: daos.world and Vader AI.fun, and explore the development prospects of Investment DAO by analyzing their operational processes and technical features.

daos.world: Aggregation platform for Investment DAO

The operational logic of daos.world is similar to that of daos.fun, focusing on an aggregation platform for Investment DAOs. Participants are mainly divided into two categories: DAO managers and fundraisers ( whitelist participants ).

The operation process is as follows:

1. The DAO manager publishes the fund on the platform to raise ETH.
2. Participants who obtain the whitelist purchase DAO fund shares during the presale phase to raise initial capital for the fund.
3. After the presale is completed, all raised ETH will be handed over to the DAO treasury, which is managed by a smart contract. The platform will mint 1.1 billion ERC20 tokens representing the DAO treasury, of which 1 billion will be allocated to the fundraisers, and 100 million will be added to the Uniswap v3 liquidity pool.
4. The ETH raised through investments or trades by the fund manager on BASE.
5. When the fund matures, trading stops, and the fundraisers receive profits or bear losses according to the proportion of DAO tokens.

daos.world has some unique features in its technical design:

• Liquidity Pool Design: By setting the initial price of the Uniswap pool, ensure that the asset value is not lower than the amount of ETH raised.
• Antipull mechanism: Conduct background checks on the DAO fund team, review the roadmap, implement strict KYC processes, and introduce a multi-signature mechanism in the latest DAO to prevent malicious fund withdrawals.

Compared to daos.fun, daos.world currently has relatively fewer functions, but it also maintains the openness and transparency of asset management.

Vader AI fun: AI-driven vertical domain investment DAO

Vader AI fun is a member of the Virtuals ecosystem, an AI agent project on the Base public chain. Its vision is to enable users to easily invest in specific themes or strategies without the need for personal management.

Vader AI fun has launched three scales of DAO funds:

• Micro Cap: Agent with an investment market value between $100,000 and $2 million.
• Small Cap: Investment market value between 2 million to 10 million USD for Agents
• Mid Cap: Agents with an investment market capitalization between 10 million and 100 million USD.

These funds are managed by AI agents, integrating thousands of machine learning-based trading strategies, clearly defining parameters such as investment scope, rebalancing frequency, and position limits.

The process to participate in Vader AI fun is:

1. Stake $VADER tokens to join the DAO
2. Use $VIRTUAL tokens as investment funds
3. Reserve 10-20% of $VADER as liquidity reserves
4. Earnings are distributed to participants in the form of $VADER.

Vader AI fun also has two types of DAO: active and passive, managed respectively by humans and AI, collecting different proportions of management fees and performance fees.

Features and Risks of Investment DAO

Investment DAOs aim to achieve investment democratization by breaking down traditional financial barriers. However, there are also some risks involved:

1. Investment success heavily relies on the ability of the fund manager, and there is a risk of rug pull.
2. The market value of some projects is too high compared to the net value of the fund, creating a strong speculative atmosphere.
3. Not very friendly for retail investors to participate, there are thresholds for obtaining whitelist.

Conclusion

With the explosion of AI16z, Investment DAOs have regained attention. In the future, there may be more Investment DAOs targeting vertical tracks and new aggregation platforms that address existing pain points. The development of this field is worth continued follow.