All Investment DAOs Rated and Reviewed by CoinLaunch

An investment DAO stands for a Decentralized Autonomous Organization and refers to a group of people that collaboratively research the market and make decisions on investing in different blockchain-based projects. This fund structure allows even the smallest investors to pool their money and decide when and where to invest funds. What’s more, there is no leader among investors since they all take part in a decision-making process by voting. The voting power of a particular investor is directly proportional to the number of governance tokens they hold or their share of the investment pool. As a result, investors with a significant portion of the overall amount of tokens can swing the voting process to their favor. It is considered one of the most transparent and fair management systems of investment funds.

An investment DAO usually has a management team to search the market, identify and analyze potential investment opportunities. After careful and meticulous analysis, they invite all DAO investors to vote on investing in a particular asset or project.

DAO distributes all earned dividends or investment returns among its members directly proportional to their deposits in the fund. In addition, being truly decentralized communities and having some crowd influence and good connections, investment DAOs can also get an access to exclusive investment opportunities (allocations in hot token sales) that may not be available to individual investors.

The main difference between DAO and other funds is that there is no leader or centralized authority here.

The second difference lies in the decision making process. As a rule, investment DAOs put money into projects from blockchain, NFT and crypto industries. When an investment opportunity appears, all fund members vote for whether the investment should be pursued or not. By the way, not all holders of governance tokens (or LP tokens) can make proposals. To prevent spam sharing, investment DAOs usually set specific limits regarding proposal creation and participation. 

Also, an investment DAO has its own financial system, access to which investors can get after approval from other members of the community. When a fund earns a profit on its investments, the earnings are distributed among investors in direct proportion to their deposits in a fund. 

Finally, all the activity and financial operations of an investment DAO is completely accessible and transparent for all the DAO fund members.

1. Investment DAOs are a relatively new approach to investing that allows investors of different sizes to pool their resources and make collective investment decisions.
2. One of the advantages of investment DAOs is transparency and security attained through the use of blockchain technology. Every decision and every transaction is recorded on the blockchain and is viewable by all the DAO members.
3. Another advantage of investment DAOs is their global nature. Such DAOs can attract participants from all over the world and invest in projects anywhere in the world.
4. Investment DAOs are inclusive, which means that accredited investors that acquire fund’s governance tokens can contribute almost any amount of cryptocurrencies to the fund and get profit from their investments.
5. One of the key pros of investment DAOs is fairness. Every decision of the fund is made after the voting process among its participants. The more governance tokens investors have - the greater influence they have in shaping decisions within the organization.
6. Legal Restrictions and Responsibilities. Being a truly decentralized organization with no leader, legal definition, and often anonymous members, an investment DAO fund is almost invulnerable to any legal restrictions and issues.