DAOpulse Issue #5: The Moon is So Yesterday

mStable, a DeFi protocol created a Team DAO and is listed at the top of DeepDAO.io’s rankings * We highlight its governance jurisdiction and contextualize how DAOs create transparency

We’re witnessing an incredible growth in the total valuation of the DAOs we cover on DeepDAO.io, rising from 62M on August 7th to over USD 393 (!!) at the time of this post. It’s an exciting time for sure, and there are so many new developments in the DAO space that it’s hard to keep up! For example, we are listing a top DeFi protocol for the first time with more soon to follow. In fact, at this rate we are on track to offer insights into a collective that controls over a billion dollars in assets before you know it. Forget the moon, we are going way, way further.

A Governance Token and its Jurisdiction

As mentioned, the DAO ecosystem is growing quickly in value these days, driven in no small part by DeFi projects (as mentioned in DeepDAO’s DAOpulse #2) whose tokens (often stablecoins) are being held by various DAOs. This week however, we flip the script and look at a DeFi project that has launched a DAO for governance of its stablecoin product.

mStable, a sort of meta-stablecoin product with a built-in insurance mechanism recently launched an accompanying governance token called Meta (MTA). The token was launched on July 18th of this year via a Mesa auction and quickly climbed in value to over 16x its seed price of  USD $.15. Today the token trades at around USD $6.507.00, giving the governance portion of the business a market cap of just over USD $22.29M. There clearly is something alluring about controlling the rules of a set of financial instruments!

The MTA token has several purposes including giving the bearer some say in governance such as adjusting platform fees or assigning rewards as well as the opportunity to stake the token for a reward of some of the fees the mStable system generates. 

The most meaningful part to us DAO geeks is that they are using an Aragon DAO to (eventually) allow the community to manage the governance of mStable through ownership of MTA tokens. Today they are somewhere between Phase 1 and Phase 2 of their governance roadmap and we look forward to watching the original creators hand off control of their baby to the MTA token holders as promised. On the money side - as of this writing, the mStable DAO is in control of over 210M USD!

Computing the DAO Value

Reporting Note: Here at DeepDAO, our data is based on the DAO portion of any larger system, whether it exists as a DeFi company or otherwise. This will make the company value that we report different from the market cap another site may report, because they are truly two separate things. In one case, the organization controls the mechanics of an instrument that has a particular vogue when summed across all holders (market cap), in our case, we are considering only the assets the DAO actually has under its specific control. For mStable and MTA, because mStable is in possession of so many of their own MTA tokens, their AUM that we report is actually higher than the market cap of the MTA token. Be sure you understand the aggregation logic behind any given metric so that you can put the reported values in the proper context.

Move Over LinkedIn + Glassdoor

Information asymmetry has traditionally allowed organizations, especially private companies, to control their messaging in the marketplace. Opacity was an expected part of running a business, and there have been tales of corporate espionage where competitors and potential investors sift through a company’s garbage or hire private investigators to help find information in order to make an informed bet or determine likely next moves. 

Companies like LinkedIn and Glassdoor have completely changed the information game. They  force a certain amount of transparency through the provision of useful services to both employees and the organizations that require public provision of previously guarded information. Salaries, relationships, retention, executive popularity and more are all out there for the public to see, aggregated and organized and searchable at everyone’s fingertips!

Regardless of how painful it was for organizations to have their (formerly private) laundry aired, these information aggregation companies have become so dominant that, for example, in the Tech field your LinkedIn profile is your de-facto resume. Microsoft recognized this and paid 26B USD to acquire LinkedIn in 2016. 

With these standards partial transparency had arrived, and the ability to connect relationships between organizations, people, careers and more was recognized as extremely valuable.

Applying that logic to the cryptoverse, DAOs and tokens built on ETH and other blockchain backbones are transparent because of how permissionless, distributed ledgers work. In order to update the record, you must shout it out loud to all the ledger-keepers. Never before have the inner-workings of an organization been so open. Voting records, proposal details, and atomic financial records are available to anyone who cares to dig. This is the power that public blockchain driven DAOs allow.

Interpretive tools built for scrutinizing the data that is a natural part of basic blockchain accounting provides an extensive window into a huge array of organizational behaviors. Tools that allow us to transform these behaviors into insights get us one step closer to really understanding how an organization works, and could offer in some cases a glimpse of its likely trajectory into the future. 

As an obscene amount of money flows into DeFi and DAOs, the institutional investors have begun knocking. With the right tools (hint hint - DeepDAO.io 👀 you guessed it!) we can be extremely efficient in our information gathering, and due to the blockchain backbone of all of this, transparent, permissionless sleuthing turns us all into potential forensic accountants. We can trust but also verify - it’s just cryptobusiness, baby. 😉 

Conclusion 

Look where we are. An organization with assets in the neighborhood of a quarter of a billion dollars is transparent to everyone!

The “5 seconds visitor” to DeepDAO.io can eyeball the numbers and see the general direction the company is headed in.

The “5 minutes user”, interested in more details and analysis can browse through the various tabs and get insights into the financial direction, and decisions mStable’s team (and later their community) are taking. She can also look at governance style and internal power distribution. 

The “5 hours user”, maybe a potential investor or an otherwise curious researcher, would be able to load our datatables and then run her own queries and analysis. If she - or you - want to go even deeper, we’re working on implementing an API to all our data as well as providing custom reports - do reach out!

Blockchains are great, aren’t they? Like we always say: they won’t solve all the world’s problems but they are taking us a step forward, which is plenty.

(DAOpulse #5 was written by Ivan Sucharski and edited by Eyal Eithcowich and Daniel Bar)