Syndicate Turns Ethereum Wallets Into Investing DAOs for 'Just the Cost of Gas'

 Whether it's to buy an NBA franchise, the Blockbuster brand, or the Dune Bible, decentralised autonomous organisations (DAOs) must generate and manage funds.

Syndicate, a decentralised investing system and social network for forming DAOs that debuted in August 2021 with backing from Coinbase Ventures, Ashton Kutcher's Sound Ventures, and Snoop Dogg Ventures, among others, believes it offers a financing technique as simple as attaching a MetaMask wallet.

It launched the public beta of its Web3 Investment Clubs yesterday. Syndicate claims that any Ethereum wallet can be turned into an investing DAO using the product for "only the cost of gas," alluding to the Ethereum protocol's transaction costs.

An investing club is traditionally a small group of people who combine their money and resources to invest in assets or purchase real estate. These groups usually meet on a regular basis to explore new enterprises and evaluate how existing investments have performed.

DAOs, in which groups of people from all over the world pool their crypto and use their own governance token to decide how funds are spent, fit in perfectly with this. Neptune DAO and BitDAO are two DAOs that have taken on the responsibility of becoming Web3's version of venture capital.

Syndicate's Web3 Investment Clubs use an ERC-20 infrastructure to run natively on Ethereum, allowing clubs to take advantage of Web3. Snapshot can be used for on-chain governance, automating token distributions, delivering token airdrops to new users, and recognising contributors, for example. Other blockchains will be added in the future, according to Syndicate.

So far, the project has been successful in attracting a diverse range of participants. Syndicate co-founder Ian Lee told Decrypt via email that "more than half of the DAOs opening investment clubs on Syndicate are either women-led or all women DAOs, including Awesome People, GCR, Eve, The Council DAO, We3 DAO, Women in VC DAO, and more."

How to start an investment club

To form an investing club, founders will need to connect a wallet to the Syndicate network, such as Metamask. Any existing assets in the wallet will be available to all club members, and deposits will be gathered in that wallet. The platform will give a club token symbol after the investment club creator chooses a name.

The founder will next enter the amount of USDC they intend to raise (USDC is currently the only cryptocurrency supported by the site). On a 1:1 basis, the amount entered will be paid out to members in the club's token. After then, the founder will decide how long deposits will be accepted, allowing others to join the club.

The creator will then decide on the maximum number of members who can join the investment club, which is 99. "To maintain their existence in the United States, investment clubs must meet a variety of standards, including having fewer than 99 members," Lee noted. The founder can start the investment club after agreeing the terms of service.

Web3 Investment Clubs, according to Syndicate, can invest in tokens and NFTs, as well as off-chain enterprises and assets, with their assets. Members' money can potentially go further by combining their investments. Club tokens, according to Lee, aren't meant to be used as an investment vehicle; they're non-transferable and exclusively used for voting and governance.

Doola has partnered with Syndicate to allow DAOs that use the protocol to create legal businesses, open bank accounts, and file K-1 tax returns. Syndicate also announced a partnership with Latham & Watkins LLP, which would create free standardised DAO legal forms for Syndicate investment clubs that can be delivered, signed, and collected through the Syndicate web interface.