The LAO: the Limited-Liability, For-Profit DAO
Investment DAOs are decentralizing and democratizing venture funds by displacing functions such as managing a fund and the roles of LP and GP to the members of the DAO. The DAO was the first to experiment with funding across the Ethereum ecosystem, which ended up causing a new fork of Ethereum due to legal and technical issues. MolochDAO followed soon after in order to reinvigorate interest in DAOs with a sophisticated governance model in place with the goal to fund public goods, projects, and development of Ethereum 2.0. Since then, several DAOs have formed with varied compositions such as MetaCartel Ventures, Honey DAO, etc.
From the time of The DAO, teams have become more cognizant when it came to protecting and building secure smart contracts, but regulation didn’t evolve as quickly. To remedy this, Tribute Labs (formerly known as OpenLaw) formed in 2017 and gradually helped take on launching DAOs securely.
Compliance and Smart Contracts
Tribute Labs was launched by Aaron Wright and David Roon, with support from ConsenSys. The vision was to help crypto projects create, execute, and store legal agreements in one place. Its main function today is to provide software and support services to help form and run DAOs, with the crucial feature of handling legal matters. The team was able to successfully wrap traditional DAOs as legal entities. In July 2021, Tribute Labs launched the Tribute DAO framework, which enables building and managing DAOs through a modular architecture offering.
There is plenty of legal gray area when it comes to meshing the digital world and physical and Tribute Labs successfully bridged legal agreements to executable Ethereum smart contracts, creating safety for DAOs under U.S. law. It now powers the largest DAO network and will continue to support new launches that are technically and legally sound. Jointly, this DAO network has collected over $156M in Ether across the DAOs, supporting over 120+ projects, collecting thousands of NFTs, and deploying millions into DeFi. In return, as a service provider, Tribute Labs takes a fee. DAOs in the network include:
Eshita is a Research Analyst at Messari focused on Web3 topics. Previously, she was a Venture Fellow at Bloomberg Beta and prior to that was working on data at Shareworks by Morgan Stanley.