Raising money from VCs is a real pain for entrepreneurs. In addition to regulatory hurdles and the fact that founders need to disclose their identity, startups need to find interested investors, negotiate and agree on legal and commercial terms before actually getting access to the much-needed capital. The number of VCs investing in blockchain is also very limited compared to the available capital from retail crypto investors. When teams decide to raise capital from VCs, they face dangerous conflicts between token and equity holders.
ShineDAO aims to provide a decentralised alternative to this process. By enabling retail investors to get in early and help the project, we believe that we can surpass the value that is generated by traditional VCs whilst keeping incentives in check and giving founders a peace of mind.
When developing most crypto projects, teams will source capital from a small subset of investors on a private sale, build a product in isolation, launch the product and then first now expect a wider community to take an interest in an unfamiliar project. Having a healthy community is not only a benefit in the initial phase of a project, but given that once a community is established, organic growth will be easier to obtain for future projects, spin-offs or add-ons. The initial establishment of a community has long-lasting positive effects.
ShineDAO helps early-stage crypto projects by introducing them to a helpful community from day one. Furthermore, once the project is launched, the investors and contributors from the ShineDAO will naturally follow the projects in their journey to create their own dedicated community, be it through organic growth or marketing efforts.
The common way for early-stage crypto teams to find their early adopters is to conduct an airdrop of tokens for early community members. This is not an optimal approach as the project is essentially giving away tokens in exchange for just being at the right place at the right time without providing any value for the project. Furthermore, even if they receive the tokens, there’s no guarantee that this will incentivise them to start contributing to the project.
We reward our community for being active and generating value for the incubated project, be it through feedback or in any other way the project requires outside help. By having mechanisms in place where project members can get multiple viewpoints on a proposal, we enable them to create better products at a faster pace.
Early blockchain teams need an environment in which they can test their ideas and fail fast without jeopardizing the trust of their community. Failing provides valuable insight into what aspects of the product do not work and needs to be changed. However, there is a risk that the community sees these learnings as mistakes or sloppy execution, which could affect the legitimacy of an early project. At ShineDAO we create a safe space where projects can propose ideas, get rapid feedback and iterate on their product.
Awareness and buzz is without a doubt important and the earlier a project can reach out to a potential user base, the better. A healthy community is a key enabler to create awareness but it might not be enough to create the reach that's needed. ShineDAO helps projects to grow their exposure through contributors and advisors. The contributors and advisors will receive tokens of the incubated project, which incentivises them to promote and spread the word about the project.
Blockchain startups often have limited access to top advisors in the industry that possess valuable insights. This coupled with trust issues explains why most successful projects in 2021 are being funded by traditional venture capital rather than by a decentralized community in early stages of the project. ShineDAO provides sector-specific and operational experts that support projects with valuable insights, taking into account their specific needs. Advisors are hand-picked for each specific project and will be rewarded tokens from the incubated project.
Token economics is one of the biggest challenges when designing blockchain protocols. We support defining robust models including the governance system, the mechanisms for revenue sharing, and the ease of access for users. We see that each protocol will be different when it comes to the specific utility of the token. This, together with the fact that each project is solving a specific problem, will lead us to have a tailored approach to the token valuation for each project.
We believe that there’s great power in designing sound mechanisms and incentives for token holders and it will be one of our main focuses when incubating new projects. This will ensure that participant behaviors are fair, robust and result in a better project overall.
Releasing unaudited protocols has already caused huge scandals in the past. We will establish cross-team code reviews, community reviews and reach out to advisors that help plan project security infrastructure. Before we list a project for IDO, we will conduct security audits to minimize investor risks and publish them to create transparency on the efforts we take.
At ShineDAO, we strongly believe no user should watch a youtube video to understand how to use a product. Good design removes friction and makes using products intuitive by giving users enough information so they can proceed to make decisions with high confidence at every step in their customer journey.