DAO Maker, a platform for retail venture investing in equity and tokens, has launched Public Strong Holder Offering (SHO) as its latest service to facilitate fundraising for blockchain and cryptocurrency startups. Through this Public SHO, DAO Maker has opened the floodgates to access an unprecedented volume of market liquidity.
SHOs are a mechanism or service which utilizes certain procedures to choose genuine investors for funding crypto projects. For example, SHOs analyze on-chain data, user activity, liquidity provider (LP) status, and interaction with previous projects. These data sets help in choosing the right kind of investors for a particular startup, building a community around the project. Investors too can apply for a refund if the projects perform poorly and the developer team fails to deliver.
The Public SHO model from DAO Maker is a first-of-its-kind innovation in the crypto investing space.
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Facilitating Fundraising With DAO Maker’s Public SHO
DAO Maker makes participation in fundraising procedures accessible and open to a diverse set of crypto holders. Any user who has completed the KYC process and has $2500 worth of crypto in their wallet on EVM-compatible networks can participate. The platform creates a profile on the basis of the user’s wallet activity. Thus, projects can choose investors from designated groups like DeFi, NFTs, GameFi, depending on wallet usage.
The DAO Maker Public SHO is divided into two segments: the ‘Freemium’ and ‘Premium’ services. While the former is ‘free’ to access, premium access requires holding $DAO tokens. Users need to stake at least 2000 $DAO tokens in the DAO Vault to upgrade to the Premium version. Quite obviously, the Premium DAOs have a greater chance of winning bids and a larger allocation of funds. But DAO Maker generally uses a sophisticated on-chain analytics system to decide the winners of the Public SHO.
The protocol calculates a score for each user wallet using certain parameters. These parameters are as follows:
DAO Maker calculates the final score of every user and dynamically chooses the winner of the Public SHO. Winners of the SHO need to pay 30% fees on their tokens.
The SHO is hosting 10% of the $10 million that Hubble recently raised from Three Arrows, Digital Currency Group (DCG), Crypto.com and several others. For platforms like CoinList, the seed to public stage surge is 20-50x, with investors buying 2% of tokens for $2 million. However, DAO Maker SHO claims to provide 2% of the same tokens at a much more affordable price to the investors. Thus, the platform aims to capture the retail investing space with investors getting early exposure to tokens. DAO Maker’s Public SHO wants investors to get the same access to tokens as Binance, DCG and Crypto.com.
SHOs: The Future Of Crypto Fundraising
According to a Galaxy Digital report, venture capital funding in blockchain cryptocurrency startups rose to $32.8 billion in 2021. However, the crypto investment space still faced some major structural problems. It was difficult to get genuine and committed investors who will not abandon a project midway in pursuit of quick profits. On the other hand, there was a risk that the project will dupe genuine investors and not deliver on promises.
Strong Holder Offerings (SHOs) provided a reliable solution for both investors and projects to raise capital for crypto startups. In 2022, crypto adoption and investment will surge from last year’s 880% growth with several startups coming to the fore. SHO protocols from platforms like DAO Maker will contribute towards a robust startup investing landscape with its sophisticated on-chain analytics.