HyperDAO has long worked towards a transparent, secure and truly decentralized investment opportunity to the masses, regardless of monetary status. For that, HyperDAO has been building towards a decentralized IDO platform where users can decide on the development and direction of HyperDAO moving forward, as co-owners of the platform.

We would like to inform our community of the feats that HyperDAO had done to ensure the achievement of our goal.

As of today, the secret key for HyperDAO’s treasury has been passed over to the node delegates. Team tokens will be reserved as incentives for node delegates. HyperDAO is going fully decentralized, with its development and future governed by the community.

We hope to see you participating in the future of HyperDAO as much as you all have during the beginnings of our journey.

But something interesting is happening in some of these online groups – not only are they coming together to communicate, they are also making decisions, much like an association or a company.

Take the Gamestop phenomenon. Gathering on Reddit, hundreds of retail investors decided to buy shares in the struggling video game retailer, hoping to squeeze out hedge funds who had bet the stock would fall. It worked.

“This signifies an incredibly disruptive moment in traditional capitalism through centralised entities,” says Joni Pirovich, founder and principal of Blockchain & Digital Assets Services + Law. 

While Gamestop involved individual activists buying shares with their own accounts, elsewhere on the internet, collective action is going deeper: hundreds of new internet communities are allowing members to own and manage a business.

The mission of the enterprise is being put into computer code, along with all the operating rules. The protocols operate on a decentralised network of computers. These are known as ‘decentralised autonomous organisations’ or DAOs.

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They are powerful because they allow groups of like-minded people to make decisions, vote and act. They have built-in treasuries that can be accessed only fi the group approves. Decisions are made via voting processes, ensuring everyone has a voice.

If it were a DAO, wallstreetbets groups could not only talk about the stocks that members should go out and buy, but allow members to contribute funds and invest them after a democratic vote. A sporting club could set up a DAO allowing members to decide whether the budget is spent on new football jerseys, or a fridge for the tuckshop. Environmentalists can allocate donations to the campaigns they see as the most important.

If it becomes law, Australia could be the first country to formally recognise the DAO as a legal structure.

DAO protocols are powerful because they are transparent. They allow computer rules to create trust, rather than discretion being given to some manager you don’t know. A CEO or treasurer can’t spend funds on their whim. All the spending is tracked, the decision-making is open for all to see, and the code governing a DAO is available for anyone to check and verify.

All of this is not theoretical: hundreds of DAOs have appeared on the Ethereum blockchain, a distributed network that provides more functionality than the one that operates the bitcoin cryptocurrency. The power of Ethereum is it allows “smart contracts” that codify and execute business rules.

Some of the best-known DAOs are appearing in the financial services space, in an area known as ‘decentralised finance’ or DeFi. These include Uniswap, Sushi Swap, Synthetix, Compound and Aave. But many others have appeared in areas relating to grants, social media, traditional media, gaming, collectables and computer operating systems.

However, these new business models have also created risks for developers and members of the communities. They operate in a legal black hole. Laws don’t recognise them as legal entities. This makes it hard to hire staff, rent premises, take out insurance and attract investors. More concerning is the potential legal liability that might attach if the law views them as equivalent to a partnership, making members jointly and severally liable for losses.

Now a landmark report by an Australian Senate committee this week plans to overcome this uncertainty by bringing DAOs into the mainstream. If it becomes law, Australia could be the first country to formally recognise the DAO as a legal structure. This would provide the protection of limited liability to those involved, and open up pools of institutional capital by recognising the model as a proper legal entity.

“This signifies an incredibly disruptive moment in traditional capitalism through centralised entities,” says Joni Pirovich, a lawyer and one of the founding members of the Digital Law Association, which proposed the DAO Limited model to the committee.

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If legislated, traditional capital raising forums like the ASX, which is filled with speculative mining companies operating opaquely paying expensive fees to managers and advisers, could come under pressure. Rather than form a traditional company, a speculative miner might form a limited liability DAO, raise capital through a token and allow a global community to watch and participate in the development of a tenement.

“That is a competitive threat to centralised investment companies via shares, where senior executives give themselves bonuses without accountability and don’t share profits with their customers, that has created distrust in large organisations,” Pirovich says. “That is part of the movement and why people identify with a decentralised autonomous organisation.”

The Senate report wants Treasury to set guidance on how DAOs might operate so regulators don’t stifle their growth.

RMIT associate professor Chris Berg: “A company has a mandate to operate on behalf of its shareholder, but a DAO is its shareholders.” Supplied

“It is astoundingly forward-thinking,” says Chris Berg, associate professor, RMIT University. “A company has a mandate to operate on behalf of its shareholder, but a DAO is its shareholders.

“The proposal is not to turn all corporations into DAOs but to provide entrepreneurs with a new option on the menu when they are considering how to structure a corporate form. It is a structure that is designed to facilitate decentralisation and provide the legal protections and certainty that traditional investors, or employees working for the DAO, need to go about the lives.”

Australian-based creators of DAOs say the recommendations of the report, titled Final Report, The Senate Select Committee on Australia as a Technology and Financial Centre , if implemented, could put Australia at the centre of a rapidly growing global industry.

Pat McNab is the co-founder of Mycelium, which developed the Tracer DAO, a platform for trading “perpetual swaps”, which are derivatives that don’t require trading of the underlying asset and will allow users to build new markets for hedging a wider range of risks. He says an Australian DAO law would act as a magnet for entrepreneurs.

“There are billions of dollars and many DAOs set up purely on Ethereum that are looking for a jurisdiction to anchor themselves to, which provides a court system, enforcement, and a reasonable tax rate. A few DAOs have looked to places like Switzerland, but Australia, if appropriate regulation comes into place, could be an attractive place for DAOs to ‘safe harbour’ and anchor into, which in our eyes is extremely positive,” he says.

Mycelium co-founder Pat McNab: “It is a clear, open framework that is transparent.” Paul Harris

“DAOs, in terms of their smart contracts infrastructure, provide more cost-effective decision-making frameworks for organisations. It is a clear, open framework that is transparent. You can clearly see the flow of funds, the voting outcomes, there is resistance to fraud – the implications are massive, we have only seen the tip of the iceberg.”

There is a still a long way to go, but the US state of Wyoming has made inroads into recognising decentralised entities. In July, it passed DAO LLC legislation that attempts to close the gap between formalised corporate structures and unincorporated groups governed by smart contracts.

It recognised, DAOs are useful for collectively raising and deploying money, operating fast-moving marketplaces, and that they underpin much of the decentralised finance infrastructure challenging traditional banking.

Wyoming has formalised protection for DAO developers and those who participate, prohibiting lawsuits against DAOs as general partnerships and giving DAOs rights as legal persons in state court.

“It borrowed the best of both worlds, from the corporation and the partnership,” says Michael Bacina, a partner at Piper Alderman. “It offers limited liability for shareholders and informal procedures for decision-making by partners.”

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“If a company can be a nexus of people working together, and we can automate the role of directors, there are profound ways we can work more efficiently,” he says. “This could be a generational shift in corporate legislation, though it will be a challenging model to interface and require a higher degree of computer literacy than currently. But it sets the path for digitally native generations to operate much more efficiently and transparently.”

As it stands, DAOs are only understood by a small group of digital asset lawyers, but Pirovich reckons the structure will eventually come into the mainstream.

“For lawyers, DAOs are the new global corporate structure,” she says. “They will become a tool in the tool belt of all professional advisers and rapidly expand, especially if Australia recognises a limited liability DAO.”

James Eyers writes on banking, fintech and technology. Based in our Sydney newsroom, James is a former Legal Affairs and Capital editor for the Financial Review Connect with James on Twitter. Email James at jeyers@afr.com.au

Jessica Sier writes on technology, internet culture, cryptocurrencies and software from our Sydney newsroom. She has previously covered global capital markets and economics. Connect with Jessica on Twitter. Email Jessica at jessica.sier@afr.com

DeFi infrastructures have matured sufficiently for new projects to raise much-needed funds through new DeFi protocols. This method is called an Initial DEX Offering (IDO). Compared to ICOs and IEOs, IDOs can be seen as a comprehensive improvement in every measure, and its advantages have been recognized by an increasing number of investors and projects.

These advantages include openness and transparency, fast transaction speed, high liquidity, and decentralization. At the same time, investors can have direct control over their own assets, and projects can quickly launch their tokens on the secondary market after their IDO ends.

In its earliest iteration, HyperDAO (HDAO) operated as a one-stop crowdfunding platform, providing investors and projects with customizable, secure, and decentralized financial services. The platform’s professionalism and stellar performance has been recognized by users on many occasions. The official launch of HDAO’s IDO launchpad marks the birth of a completely decentralized crowdfunding platform and the many advantages that the IDO launchpad possess have also prompted more projects to apply for an IDO through HDAO.

HDAO’s new IDO platform is dedicated to providing projects with the necessary support it needs to conduct an IDO, and the platform pledges to deliver these services at the lowest rates in the market. At the same time, the platform will ensure that due diligence is done on each project, and every project must provide a security deposit before an IDO. This is done to guarantee the trustworthiness of each project to protect the interests of users. Other advantages include:

1. No rug pulls: investors’ funds will be stored in a custodial wallet. These funds will only be released to the project team after their investors have voted to do so through a DAO;

2. Quality assurance: The platform will conduct a full range of due diligence on the technical capabilities, operational efficiency and credibility of the team for all new projects.

3. Fairness and equity: The implementation of a tiered system to ensure that investors on all levels can get an equal allocation.

4. Transparency: Transparency is of the highest priority for every new project, which must store its funds in a third-party custodian that can be easily traceable on the blockchain network.

As of now, HDAO has received IDO applications from 18 projects around the world, and HDAO will conduct a full range of due diligence measures next as a follow-up on these applications. Every project selected by HDAO must meet a strict list of criteria to proceed. HDAO's vision is to build a bridge connecting quality projects and investors and the team seeks to continue to provide a transparent, fast, and sustainable IDO platform, establish measures to protect investors and provide the necessary support to allow new projects to flourish within the cryptocurrency market.

HDAO has been consistently building up its ecosystem and has recently announced a strategic partnership with NFT platform Dropgen to promote the development of the NFT sector. Right now, HDAO has launched a campaign with football dead punks (a subsidiary of Dropgen) to gift 10 NFTs to 10 lucky supporters. For more information on participating in this campaign, please follow HDAO’s social media channels to get the latest updates.

Therefore, to better serve its global network of users, HyperDAO has decided to upgrade its network with the construction of a cross-chain bridge. The project has bridged its native token HDAO to Binance Smart Chain (BSC), which would reduce transaction costs and settlement times, and would benefit HDAO users as a whole.

Why is BSC network the preferred choice for HyperDAO?

• While the team did consider other alternatives such as Solana or Cosmos, BSC was ultimately chosen thanks to its unprecedented functionality, including its compatibility with the Ethereum Virtual Machine (EVM).

• BSC was created by Binance, one of the largest cryptocurrency exchanges in the world. The chain also boasts smart contract functionalities and EVM-compatibility, which means that it can easily port over apps and users on the Ethereum network.

• BSC can achieve 3-second block times by using the proof-of-stake consensus algorithm, and its network fees are also much lower than Ethereum.

HyperDAO’s growing focus on interoperability will ensure that its network can cater to a growing number of users. In the future, it will work with more blockchain networks to cultivate mainstream adoption. Soon, blockchain interoperability will be more seamless, and applications within the HyperDAO’s ecosystem would be able to connect with other blockchains. HyperDAO’s cross-chain bridge to BSC is only the start, and the team has expressed that they will continue to make necessary upgrades and adjustments to improve the user experience. 

Plans for the Future

In addition to the cross-chain bridging, HyperDAO has also decided to host a node recruitment session to select leaders to take charge of governance decisions within the network. There will be a total of 9 nodes, and users selected to manage them will be conferred major responsibilities to maintain the overall security and stability of the HDAO network. All major decisions about the future direction of HyperDAO will be decided via community voting, and nodes can bring forth proposals that they deem beneficial to the community. 

On the IDO side, as of October 22, more than 13 projects have applied to conduct an IDO on the HyperDAO platform, and the trend is likely to continue for the foreseeable future. As a one-stop decentralized crowdfunding platform for promising projects, HyperDAO will continue to provide investors and entrepreneurs with safe, transparent, fair and equitable financial services. 

When investors participate in an IDO organized by HyperDAO, the platform will ensure the safety of their funds, while adhering to the principles of fairness, security and transparency. The credibility of all new projects will be verified to protect the interests of users. As such, new measures that will be established include:

Custodian wallet – all investors’ funds will be stored in a custodian wallet (an address managed by a third party, which can be queried through a blockchain explorer). Funds will be released to the project team only after all users in the DAO vote to do so. 

Due diligence – The platform will conduct comprehensive due diligence on the technical capability, operational efficiency and team members of all new projects.

DeFi infrastructures have matured sufficiently for new projects to raise much-needed funds through new DeFi protocols. This method is called an Initial DEX Offering (IDO). Compared to ICOs and IEOs, IDOs can be seen as a comprehensive improvement in every measure, and its advantages have been recognized by an increasing number of investors and projects.

These advantages include openness and transparency, fast transaction speed, high liquidity, and decentralization. At the same time, investors can have direct control over their own assets, and projects can quickly launch their tokens on the secondary market after their IDO ends.

In its earliest iteration, HyperDAO (HDAO) operated as a one-stop crowdfunding platform, providing investors and projects with customizable, secure, and decentralized financial services. The platform’s professionalism and stellar performance has been recognized by users on many occasions. The official launch of HDAO’s IDO launchpad marks the birth of a completely decentralized crowdfunding platform and the many advantages that the IDO launchpad possess have also prompted more projects to apply for an IDO through HDAO.

HDAO’s new IDO platform is dedicated to providing projects with the necessary support it needs to conduct an IDO, and the platform pledges to deliver these services at the lowest rates in the market. At the same time, the platform will ensure that due diligence is done on each project, and every project must provide a security deposit before an IDO. This is done to guarantee the trustworthiness of each project to protect the interests of users. Other advantages include:

1. No rug pulls: investors’ funds will be stored in a custodial wallet. These funds will only be released to the project team after their investors have voted to do so through a DAO;

2. Quality assurance: The platform will conduct a full range of due diligence on the technical capabilities, operational efficiency and credibility of the team for all new projects.

3. Fairness and equity: The implementation of a tiered system to ensure that investors on all levels can get an equal allocation.

4. Transparency: Transparency is of the highest priority for every new project, which must store its funds in a third-party custodian that can be easily traceable on the blockchain network.

As of now, HDAO has received IDO applications from 18 projects around the world, and HDAO will conduct a full range of due diligence measures next as a follow-up on these applications. Every project selected by HDAO must meet a strict list of criteria to proceed. HDAO's vision is to build a bridge connecting quality projects and investors and the team seeks to continue to provide a transparent, fast, and sustainable IDO platform, establish measures to protect investors and provide the necessary support to allow new projects to flourish within the cryptocurrency market.

HDAO has been consistently building up its ecosystem and has recently announced a strategic partnership with NFT platform Dropgen to promote the development of the NFT sector. Right now, HDAO has launched a campaign with football dead punks (a subsidiary of Dropgen) to gift 10 NFTs to 10 lucky supporters. For more information on participating in this campaign, please follow HDAO’s social media channels to get the latest updates.