ICO Analysis: DAOstack

Despite the hype, there are not many fully functional decentralized applications yet. Developers are finding it extremely challenging to create the DAO framework needed to run all aspects of the DAPP. They don’t yet have all the tools necessary to organize the specifics of governance into smart contracts.

A DAO, or Decentralized Autonomous Organization, is a network of peers that encode their protocols into the blockchain, and make collaborative decisions by voting through smart contracts.

The team at DAOstack is developing the tools and infrastructure needed to become the “sandbox” for all DAOs to operate from.

DAOstack will be a platform from which DAOs can build and create their own token on. The technology is very detailed and complicated. Josh Zemel (communication guy) did an excellent job of simplifying the stack here.

ARC: The base layer of the stack, is a library of smart contracts on the Ethereum blockchain, each of which represents functional elements that can be mixed, matched and modified to create the complete governance protocol for any given DAO

The ArcHives: a set of shared registries designed to enhance interoperability among the DAOs and Dapps. Any new tool, all offers and requests, and any new DAO will all have their own registry.

Arc.js: a JavaScript library that allows devs to easily build apps on top of Arc without being familiar with Solidity or the blockchain. With Arc.js, any organization or industry has the option of creating a custom interface suitable for its own use cases. DAOstack envisions ultimately hundreds or thousands of such Dapps deployed on Arc.js.

Dapps Layer: This is where organization members will interact with the DAO through the Dapps.

Alchemy: The first App on the stack. It will be a tool to help DAOs budget and allocate resources. With Alchemy, anyone will be able to create a DAO in a few clicks and create an ERC20 crypto-token if desired. There’s also a prediction market function, that will help organizations prioritize important proposals. The future roadmap for Alchemy includes greater customizability, integration with other popular collaboration tools, mobile support, and bounty systems.

Holographic Consensus: A process where small groups can make decisions on behalf of the larger majority, in an incorrupt way. To avoid plutocracy in the DAOstack, the process will separate token ownership and voting power into two different currencies.

  • The token-a transferable token that is a form of monetary wealth, called GEN.
  • Voting power — it refers to as reputation. Reputation cannot be directly transferred from peer to peer, but rather is distributed by the passing of proposals, or by the adoption of protocols that result in reputation being transferred automatically. For example, there might be a protocol through which reputation is distributed for positively reviewed work.

Genesis DAO:  The first DAO created using the DAOstack. Its mission will be to advance the DAOstack project and ecosystem, and it will be investing in proposals, such as; a) The further build out of components of the DAO stack, including Arc and Arc.js. b) Support for/investments in collaborative applications (dApps) to be integrated into the DAO stack. c) Support for/investments in organizations built on the DAO stack.

Anyone can create proposals or stake GEN for or against the boosting of proposals. However, in order to be able to vote on proposals, some reputation within the Genesis DAO will be required.

“Eventually, the Genesis DAO will be responsible for allocating the majority of the funds expected to be generated by the GEN token sale. Funds will be transferred to the DAO gradually over time as it demonstrates increasing stability and security. The Genesis DAO will also eventually hold the ability to mint additional GEN tokens after the initial sale.”

Token

GEN is the native token of the DAOstack platform. Its main use is to vote on or promote proposals within the ecosystem. It will be distributed to contributors of value through the DAOstack framework itself, incentivizing development, promotion and adoption.

Paying for votes would be a plutocracy; therefore, you can’t buy voting power with GEN and you cant vote with it either. You can participate in a prediction market like system, where you stake for or against a proposal that influences whether or not it rises into the collective attention of the voters, the reputation holders. If you stake for proposals that the reputation holders pass, you get rewarded with more GEN. If you stake for a proposal that fails, you lose your GEN. And vice versa if you stake against proposals.

Other uses for GEN will come to fruition in the future as the stack evolves. GEN will be the primary currency for the build-out of the DAOstack ecosystem itself, with contributors to the platform rewarded in GEN, and investments into projects that are built on the stack tendered in GEN , according to the collective will of the Genesis DAO.

Below are the project vitals:

  • Total Supply: 60 million
  • Hard Cap: $30 million
  • Presale: 10% bonus May 1, 2018, at 4:00 am GMT
  • Public Sale: May 8, 2018, at 4:00 a.m. GMT https://daostack.io/

The distribution is as follows:

  • 40% crowdsale
  • 40% mintable in the future
  • 10% team/advisers

In terms of allocation, 33% ($10 million) will go to development, 68% goes to Genesis DAO, a decentralized fund in which anyone can create proposals, according to its governance protocol. Funds will be transferred to the Genesis DAO by the DAOstack non-profit gradually as it demonstrates stability and security. The Genesis DAO will serve to advance the DAOstack project and ecosystem and will be investing primarily in proposals related to:

  1. the extension of the components of the DAO stack
  2. collaborative applications (Dapps) and interfaces that will integrate with the DAO stack
  3. support for/investments in organizations built on the DAO stack

Team

After studying each of the 15 available team members’ LinkedIn accounts, they receive a better than average rank but nothing terrific. Here are a few highlights.

CEO Matan Field has a  PhD in physics and is leading expert in decentralized governance. He has given numerous interviews and two TED talks. You can listen to his most recent AMA here.

CTO Adam Levi has a  PhD in physics, as well as 22 years of programming experience. He was a teacher’s assistant at Technion, Israel Institute of Technology from 2013-2017.

In terms of marketing and communications, Josh Zemel is the guy. He designed and executed major growth initiatives for Equifax, Blue Cross Blue Shield and Toyota. He was also a VP at IMM, a digital agency.

COO Yehonatan Goldman’s profile is below:

 

Verdict

There is quite a bit of hype around this project. Their telegram is over 10,00 people deep, due to a “refer a friend” promotion they are running that pays GEM for referrals.

DAOs could be huge in the future as the use cases are endless. Dapps using DAOstack to run their own token sale on, as well as develop their voting protocols and infrastructure, is a beautiful idea.

Risks

    • This team is trying to build things that have never been built before. It seems like they may lack the talent to do this at the moment. However, there is much evidence of them putting in work. Arc and Arc.js are fully built. Check out a video of their alchemy demo here-1
    • The CEO, Matan Field, founded a project called Backfeed, in 2015. Backfeed was a similar concect to DAOstack (only without the token and tech), but it failed in early 2016. When asked about this, Mr. Field explained that he had taken too much on himself as at some point he was effectively the CEO, CTO, chief scientist and chief product. Besides, in his words, the project lacked focus overall. -1
    • Matan Field (CEO) and Oren Sokolowsky (lead dev) built an app back in 2014 called La-zooz. The app was a failure. Strangely, The La-zooz website tried to do a token sale in January, 2017. When I asked the Telegram mods about this, they explained that the La-zooz website was hijacked, and they have no control over it anymore. They linked me this article  https://medium.com/daostack/daostack-and-previous-projects-3ba3c0b69fd1  as well as an April 5th lazooz tweet. Seems legit, however sloppy of them to let their website get hijacked. -1

Growth Potential

  • The platform will include a friendly JavaScript developer environment, a modular smart contract framework and an intuitive user interface that even non-tech people can use. +1
  • The potential of DAOs are limitless. It could be that, within a few years, DAOs are everywhere. Thousands of DAOs could be on this platform. +4
  • The Genesis DAO will be responsible for allocating nearly 2/3 of the funds raised from the token sale. GEN holders will decide which projects on the DAOstack to support and which new DAPPS to fund to integrate with DAOstack. Also, in the future Genesis DAO will have the ability to mint the remaining 40% of the GEN tokens. +1
  • There are already three solid projects working on DAOstack. One can only imagine how many more there could be. Sapien is a social news network, Menlo is a platform for decentralized funding of blockchain projects, and Cultu.re is a worldwide P2P identity and contracts system to parallel those of nations and states. +2
  • It’s hard to imagine GEN holders and reputation owning voters don’t make proposals in the future for new DAOs that want to build on the stack to pay a fee or ship airdrops to Gen holders. +2.5

Disposition

Tons of potential with this one. 6.5/10 is our final score.

Investment Details

*There will be a minimum purchase requirement of 1 ETH for both the presale and the main token sale.

Featured image courtesy of Shutterstock.

*Article adjusted on May 13, 2018 to reflect new information in the “risks” section. Therefore, the final score was adjusted upward to 6.5/10.

Author:
Joshua Larson is also known as the "Bullshit Man" for his ability to spot it a mile away. Avid ICO researcher and contributor. Former professional poker player/backer. Spent 10 years analyzing hand history, stats, and player data. Discovered blockchain in late 2016, and never looked back. He now uses his analysis skills to investigate ICOs full time. What a perfect match, because in today's crazy world of ICOs, information, passion, and diligence = dollar bills!