Syndicate protocol helps create 450 new DAOs in just three weeks
The milestone in Syndicate’s journey may indicate that DAO governance structure will become more common in blockchain and beyond.
Blockchain-based investing protocol Syndicate claims that 10% of all decentralized autonomous organizations (DAO) in existence have been created on its platform in less than three weeks of operation.
Syndicate is a DAO creation platform that has landed investments from A13Z and Coinbase Ventures, among others. The team revealed the development in a Feb. 15 tweet.
As of this morning, 10% of *all* DAOs have now been created on @SyndicateDAO.
In less than 3 weeks
And this is just the beginning.
— Syndicate ✺ (@SyndicateDAO) February 14, 2022
Will Papper, co-founder of Syndicate explained to Cointelegraph today that the project had created 450 investment clubs as DAOs, which is just a little bit over 10% of the “best estimates” of 4227 DAOs in existence, based on DeepDAO’s metrics and figures reported in Forbes.
DeepDAO is an analysis tool that tracks decentralized organizations.
The rapid influx of new organizations at Syndicate indicates that the DAO governance structure has gained popularity since their broad introduction to the crypto mainstream just a couple of years ago. Currently, the two top DAOs are BitDAO (BIT) and Uniswap (UNI). Uniswap DAO was formed in 2020 and BitDAO in 2021. They now command a collective $4.4 billion in treasury funds.
The Republic of the Marshall Islands this week became the first sovereign nation to officially recognize DAOs as legal entities.
Syndicate’s stated goal is to democratize investing by allowing groups to establish decentralized investment structures. It automates the process on-chain, allowing anyone to set up an investing DAO in under a minute for just the cost of gas. DAOs can also plug in compliance tooling, to help keep everything in accordance with regulations.
Papper said that the team believes DAOs are “one of the most powerful structures for coordination that we’ve seen,” and that their utilization in governing businesses and clubs will become more common over time.
However, Papper said that there are trade-offs when an organization decides to utilize a decentralized method of coordinating efforts.
“Anyone who runs a DAO knows that they are much less efficient than traditional companies or other organizations. This trade-off in efficiency is worth it, however, for the increase in resiliency.”
Although there are inherent benefits to coordinating under a DAO, Papper added there are still kinks to be worked out in their mechanics:
“For DAOs to emerge in other areas, they’ll need to become more efficient at day-to-day decision making. There are compelling innovations in governance around subDAO and council models, but they’ll still need more time to fully emerge.”
The Syndicate team did not provide a list of the organizations that had been created through the platform, stating, “We don’t maintain information about our users as everything runs on decentralized smart contracts and to protect their privacy.” However Papper said the information could be verified on-chain.