In 2021, a total of 1,812 financing events were recorded in the global blockchain industry, while 1,433 events, valued at $48.674 billion, were publicly disclosed with specific statistics. Besides, events like ICO, IDO, IEO, and ITO were not counted. With new projects springing up and the demand for investment running high among investors, tokens from financing platforms are sought by the funds.

There are 6 common headaches facing financing platforms:

1. Costly admittance:

   High threshold; Guided by funds, institutions, exchanges; Be unsure of fairness for retail investors

2. Good and bad projects are jumbling together:

   Good and bad IDO projects are jumbling together; Specialized evaluation and finding mechanisms are lacking among retail investors, who are faced with high risks

3. Complicated lot-winning mechanism:

Lot-winning mechanisms are complicated among IDO platforms, which impedes the understanding and participation of users

1. High threshold for financing:

   Searching for VC financing and centralized exchanges, project managers are faced with high entry standards and costs;

2. Ambiguous financing:

   How project managers use the funds cannot be traced; Cooperation with financing platforms is not transparent

3. Lack of community recognition:

   Recognition is lacking among the public, an unattractive scenario for retail investors

    

Given those headaches, veDAO set up a complete operation mechanism, to build up an open and transparent investing/financing market with multiple blockchains and without entrusting or permission, to build up a specialized, effective, cooperative, and self-governing community. Therefore, we can build up an easy-to-access investing/financing platform with fairness and low entry standards, making it the source of top-level projects.

So, how does veDAO sort out those headaches? The operation mechanism will give you more insights.

Operation Mechanism

The mechanism is based on the governance of DAO and decentralized smart contracts.

The veDAO community governance decides the fundraising of projects. Voting, fundraising, token distribution, and distribution of income are completed through decentralized smart contracts.

1. Applying for financing

• Projects managers apply for financing Project managers apply for financing through the platform and submit information about projects and token selling. A certain amount of DAO tokens will be required to be pledged according to the amount of finance. After the fundraising, the pledged tokens will be returned. If the application is not passed, 20% of the tokens will be destroyed, and the rest will be returned. (In the future, the ratio of destroyed tokens will be decided by the DAO community through voting.)

   

• Referees submit an investment proposal Referees, who submit an investment proposal through the platform, are responsible for searching for quality projects at the early stage, providing the project introduction and recommendation reasons, and submitting an investment proposal. The application entails pledging a certain amount of DAO tokens. If the proposal is passed, all the tokens will be returned. If not, 20% of the tokens will be destroyed, and the rest will be returned. (In the future, the ratio of destroyed tokens will be decided by the DAO community through voting.)

  Through that process, veDAO can guarantee a positive circulation of investment proposals, to avoid low-quality proposals.

   

1. Governance through voting

• Voting Pledging DAO (or LP) tokens will bring in veDAO, and users with veDAO will become voters, who enjoy the right to vote. They will vote on the application launched on the platform. Each project can only get votes from the same voter one time, and the voter is able to vote on other projects as well if he or she wants to.

  The number of votes = the number of veDAO*the weight of vote

  Only when the affirmative votes surpass the 80% mark the application is passed.

• Mechanism concerning rewards and disciplinary sanctions The mechanism will ensure an effective operation of the governance through voting, helping elites stand out to get more governance benefits. Voters’ right to vote is decided by the number of veDAO they have and the weight of the vote, which is non-transferable and associated with the wallet address of voters. Voters share the same weight of vote at the beginning, with voters with the right choice enjoying a heavier weight of vote and vice versa.

  If the application of financing fails, affirmative voters will be considered false. If the application of financing is passed, successful fundraising should surpass 70% of the expected amount of the fundraising. For this scenario, affirmative voters will be considered as true, and vice versa.

   

• Voter Parliamentarism With the number of outstanding elites increasing, veDAO will allow voters to entrust their right to vote to agents, aka Damoclesers, who exercise the right to vote on behalf of voters. Only Damoclesers have the right to be entrusted. The Governance Committee, which has limited seats and issues the Damocleser-exclusive NFT, is formed by Damoclesers, who are an important part of the platform and share the rights of the platform.

   

• Transparent and fair voting Wallet addresses will be allowed to access while voting. The voting result will be uploaded to the blockchain and decentralized stored. That means there is no possibility of falsifying.

   

1. Fundraising

• Fundraising Process Funds will be raised among passed projects. Fund-raising applications are submitted by project managers and scheduled to launch and sell tokens/NFT through the negotiation between project managers and the platform. For investment proposals submitted by referees, the fundraising is launched by the platform, with users paying a deposit. The platform will contact the project manager to decide whether accept the community investment and if not, the deposit will be returned.

   

• Lot-winning Mechanism The lot-winning mechanism, of veDAO, is designed to enable more people to gain investment quota and to guarantee the equality and fairness of distribution.

  When the number of participants is smaller than that of selling board lots, everyone will win a lot at least. When the number of participants is bigger than that of selling board lots, more veDAO will bring more lots. Funds involved with IDO will bring more lots.

It is to those complete mechanisms veDAO owes such fair and equal fundraising approaches. For financiers, veDAO is a platform that provides a quick application without permission or KYC/KYB, and they enjoy flexible participation — to define the price and quota of financing by themselves. For investors, veDAO is a platform that helps them find projects with potential at the earliest stage, rally various resources, and keep providing quality projects. Through democratic voting at the community level, you will get real feedback from the community and maximize the investment through an equal and fair distribution mechanism.