Please describe your proposed solution.
Token Allies, the first Decentralized VC on Cardano, is poised to redefine venture capital. The VC will be managed by the Token Allies DAO, this DAO aims to ease capital flow and broaden opportunities by disrupting the traditional VC model and engaging many ecosystem participants. It is especially tailored to fuel the expansion of existing Cardano projects and provide those needed resources for those who have traction and proven business models.
There is nothing wrong with the purpose of the VCs, and it is clear that they have fueled innovation and growth in many areas. Though the centralized way of managing them, is what usually brings all sort of problems and disappointments. Private managed (centralized) VCs work with few "experts"(General Partners) that get to decide what, how and what to do with the Capital raised, leaving the investors (Limited Partners) to sit and wait in hope their funds will be wisely and carefully managed. That old model, produces also a misalignment of interests between these two parties, resulting in loosing impact and opportunities. Our purpose at Token Allies is to solve the bad part of the current VC model, while taking the good ones at higher levels, optimizing the inflows of serious money to impact driven and high growth projects, in a decentralized way, that can give all participants the level of trust, transparency, participation and results they are looking for.
Today, investment in Cardano is limited to starting level investments by Catalyst and some scarce more serious capital from a few investors (mostly coming within the ecosystem itself). Token Allies addresses this imbalance, extending the reach of Cardano's growth and development beyond this limitation, that is hindering great projects with good potential, to be able to reach escape velocity.
Acting as a Catalyst natural continuation in the Cardano ecosystem, Token Allies DAO is a community-driven platform that invites a wide range of investors from the Crypto space, to benefit from higher returns with less risk, without leaving the Crypto space, by investing in startups and companies the proper capital they need to reach sustainable businesses. It adds a unique twist to the investment landscape, pairing a unique decentralized funding model based in Cardano's blockchain technology with investors from all over the world. This fusion empowers high potential, high growth, high impact projects to reach their goals, while providing investors an avenue to optimize their capital while actively engaging in the process, without leaving the crypto space.
HOW DOES IT WORKS
Token Allies is a DAO that allow its members to become investors in FUNDs that are proposed, reviewed and approved by them. Participation on the FUNDS is optional, but to participate in them, the DAO membership is required.
All the DAO governance are proposed and debated thru our discord channels, while the voting itself will be performed at a DAO platform (1st option is Clarity platform).
The FUNDS once approved by the DAO, are coded via our own template Marlowe Smartcontract that has parameters that are set based on the DAO's decision for the fund (Amount to be raised, type of investment, minimum threshold to collect, timeframes, expected returns, expected duration of investments, requirements for companies applying, etc.) These Smartcontracts will be uploaded, run and instantiated on chain via Demeter.Run platform, which then be integrated to our own Investment Platform via its Marlowe API. Only the platform administrators will have access to this backend. The Smartcontract will be totally autonomous once instantiated in the blockchain and will either be closed once deadline is reached or the amount to be raised, securing investors and DAO valuables.
The investment platform exists today as a fully functional MVP with the capabilities to register, assign roles, manage preferences, create Funds entities (by Administrators) and allow users with Investor role to interact with those Fund entities. The platform integrates CIP30 wallets, so users can connect them to the platform, to create investment transactions and receive Tokens and returns.
Here are some screenshots of the actual platform that is currently running in preprod:
OUR TOKENOMICS
The Token Allies DAO has a three token business model, the DVC, the ALLI and the Investor ID NFT. They work in conjunction, the DVC being the governance utility token to participate in the DAO decision making process (Treasury management, Approval of Fund creation, Oversight of the DAO budget, etc), the ALLI token that works as a dual purpose utility token, first to give investors access to participate in the FUND their invested in decision making (voting which companies receive investment, approval the vesting of funds, approval progress reports from invested companies, etc) and also as a liquidity mechanism if they decide not to participate in the Fund governance, allowing them to sell the token in a secondary market. Finally the Investor ID NFT is the token that gives the investors rights to claim the returns generated by the FUND investments.
The complete details of how this model works can be found in our detailed WhitePaper in <https://www.tokenallies.com> and some clarifications in our FAQ channel at our Discord: <https://discord.gg/RREfkCdT65>
How does your proposed solution address the challenge and what benefits will this bring to the Cardano ecosystem?
Our alignment with the Challenge objectives is clear, we are building a Business Solution in the Defi space, that could fill a so much needed GAP many projects in Cardano are facing, with lack of serious money to reach their potential, specially with no outside VCs interest in our ecosystem. The impact could be huge, aiming directly to the Challenge Why statement: "Cardano needs innovations and solutions that help the ecosystem reach its potential and help improve the systems we use across the world."
Our DAO decentralizes decision-making, ensures expert due diligence, and promotes informed choices, fostering a vibrant, inclusive and transparent ecosystem. ALLI Token, minted as a utility token for investors' trust, offers voting rights in the Token Allies' fund they choose to invest in, thus reinforcing participatory decision-making, adding transparency and lowering the barriers for investment and deal flow.
Taking advantage of Cardano's ecosystem cutting edge technologies, such as the Cardano Blockchain, the Marlowe's financial Domain Specific language and infrastructure; Scaling and efficient solutions such as Demeter.run and DAO processes proven platforms such as Clarity we aim to create a unique set of trusted processes, governance rules and Smartcontracts that facilitate and secures the Funding processes needed for our model to work.
Our journey towards this innovative approach has seen countless hours, extensive expertise and immense passion. Our first platform MVP, testifies our commitment to transform investment via blockchain's potential. With Token Allies, investors and companies will have an empowering platform to drive mutual value creation.
During that journey, we have faced hard pivots to found a unique model that can really produce the world-wide impact we set to achieve, that were not easy to do, but the experiences and learnings we have collected allowed us to reach our current state that after almost two years have resulted in this unique model to approach the issues we want o solve by creating this Decentralized VC.
In essence, Token Allies is not just another VC player, but a game-changer aiming to democratize investing, making it more accessible, transparent, and beneficial for the Cardano community.
How do you intend to measure the success of your project?
As this is a development project, success will be easily measured by the delivery of its proposed Milestones, with clear and tangible verifiable outputs and evidence.
Our proposed KPIs are divided in two, the first set are there to demonstrate and allow auditory of project deliverables and progress, the second set are there to report and track on Outcomes of the project, once it start to operate in production, they are:
Project KPIs:
- Project delivery Milestones agreed and documented as our project goals and roadmap, to report on the project progress and delivery on our commitments. (Detailed description in the Roadmap section)
Outcome KPIs:
Short-Medium term
- Number of DAO members: Reaching 250 wallets holding an average of 5 DVC tokens each within the first two months of operation.
- A FUND1 with a minimum of 1 M USD equivalent target, proposed, voted and created within the first semester of operation (that means the Fund's smartcontract is enacted on the Blockchain, and open to receive investors money).
- Depending on the KPI above, start of the FUND1 Campaign to attract companies willing to apply to funds, based on the FUND1's approved terms voted by the DAO.
- Number and value of the Tokens minted (DVC and ALLI) thru time.
Medium-Long term
- Number of companies invested by the Token Allies Funds, by type series (series A, series B, etc).
- Number of companies invested, per Fund, that generated a successful Exit (reached the growth and scale purpose).
- Number of companies invested, that are using the Cardano Blockchain.
- Average return ratio to investors per Fund (in X amounts from the invested amount).
- Average holding amount of ALLIs on Fund investors' wallets.
- Average voting power of DVCs on DAO members' wallets.
Please describe your plans to share the outputs and results of your project?
As we are a DAO, all of our activities and results are shared openly with our community, thru our Channels, which are open also to the public, so anyone can jump in to our Discord, Telegram or tap into our Twitter, and listen to our spaces to check on the progress and results of the DAO.
But if the project is funded, besides from the monthly reports and POA that we will be submitting as part of the Catalyst process. We are willing to participate in any forum or event that is open to or we are invited to, so we can share the progress, lessons learned and results. So other VCs can also growth within the ecosystem to form a continuous source of Capital to foster and fuel more and more real use cases.
When we have enough experience and proof of our hypothesis we will open source our playbook and best practices.
After this project is completed, we will provide a detailed summary in writing with a nice video on the journey, accomplishments, learnings and outcomes of it.