I’m @William X , working on Debt DAO, a dao working on providing debt to DAOs.
DAO debt is extremely underutilized in this space. There are very few options for DAOs to take on debt, and as a result, many simply resort to selling tokens. For DAOs that are essentially selling tokens for liquidity, there are solutions like Olympus Pro.
Protocols however, have many more expenses outside of Liquidity Mining, and as a result, still need to resort to dilution in order to finance these expenses.
To this end, we’re using revenue based and backed financing to extend lines of credit to DAOs.
Initially, we will be looking for DAOs to overcollateralize these lines of credit with an abundance of project tokens, and treasury assets. However, as we prove out our model and begin to build credit histories for these DAOs, we can move undercollateralized lending as we move toward future cashflows.
We’re joining the Olympus Incubation program, and have also been verified as pool creators by Rari Governance. We’ve heard our approach described as the “Frax of lending” and given Frax’s expansive visions for the usage of Frax in this space, we think this will be a very fruitful partnership for both sides.
We hope to provide access to discounted token swaps with debt DAO in the future (pending approval and discussion by debt DAO governance) to help solidify this partnership.
What we’re proposing:
We’re seeking to creating an AMO to
- Providing 2.5 million Frax to a Fuse Pool 122 for the purpose of extending lines of credit to whitelisted DAOs that meet debt DAO’s stringent requirements, receiving DP1 (Debt Pool 1) in exchange.
- initially, we’re looking towards Index Coop as the primary recipient of this line of credit, however, debt DAO will provide a report detailing the financials and an analysis of whichever DAOs are whitelisted.
- Whitelisting debt DAO to stake veFXS
- We don’t foresee needing this in the immediately, however we’re leaving this option open just in case
- encourage the utilization of Frax among DAOs and across the metaverse
- diversify the backing of Frax with less correlated assets
- provide DAOs with financing to allow them to invest in growth
- Solidify a relationship with debt DAO
- the DAO defaults on a loan (highly unlikely, but loan will be overcollateralized)
My vision is that debt DAO can work closely with Frax on onboarding many new DAOs and empowering a new wave in how DAOs get financed.
If you’d like to learn more about debt DAO, feel free to join our discord server, https://discord.gg/jmkS7a2h and read the docs https://williamx.notion.site/debt-DAO-docs-92bca987c1d341cfb443cb415c86ae70, and check out our DD framework://near-diploma-a92.notion.site/Debt-DAO-Loan-Origination-Risk-Analysis-and-Monitoring-Framework-beta-v0-2-711baea0929b4be9b071d5c7be9b67d7