The role of DAOs in Venture Capital and funding

Karolina

19 May 2023
The role of DAOs in Venture Capital and funding

The ever-evolving finance and investment landscapes have been significantly impacted by decentralized autonomous organizations (DAOs). DAOs are causing a paradigm shift in the traditional venture capital sector. Blockchain technology enables the growth of these disruptive organizations, which are redefining venture funding and management. DAOs showcase decentralized governance, transparent decision-making, and unique funding approaches. These aspects revolutionize access to capital for entrepreneurs and early-stage investor participation. In this article, we delve into DAOs in venture capital, focusing on their potential to transform the industry, their benefits, challenges, and real-world use cases in shaping funding innovation and entrepreneurship.

Evolution of Venture Capital

Understanding DAOs in venture capital impact requires grasping traditional investment models' evolution. Traditional venture capital features centralization, with few investors controlling funding decisions. This creates entry barriers for entrepreneurs and limits opportunities for a few favored people. Decentralized finance (DeFi) and blockchain technology birthed a more inclusive, accessible option. DAOs use smart contracts and consensus-driven governance, disrupting the venture capital scene. Decentralization principles position DAOs as a new venture capital frontier, enabling a democratic, transparent funding process for innovative projects.

DAOs in Venture Capital and Funding

DAOs represent a paradigm shift in how companies raise capital and manage their operations. They open up new possibilities for venture capital and funding by bringing the following features to the table:

  • Decentralization: DAOs distribute the decision-making authority among its members, eliminating the need for intermediaries or centralized authorities. This makes the funding process more efficient and transparent.
  • Tokenization: DAOs use cryptographic tokens to represent ownership or voting rights. This enables investors to have a direct say in the operation and governance of their investments. (Interested in DAO tokenomics? Check out our article!
  • Smart Contracts: DAOs utilize smart contracts, self-executing contracts with the terms of the agreement directly written into code. These contracts automate many processes, reducing the need for manual intervention and potential for human error.
  • Global Access: Given their decentralized nature, DAOs enable anyone, anywhere, to participate in venture capital funding. This widens the pool of potential investors and fosters global collaboration.

Investment DAO

DAO is transforming the VC industry. Investment DAOs are crucial for sourcing, evaluating, and managing investments. They use blockchain and smart contracts for a democratic, transparent process. DAOs in venture capital pool funds from contributors. This allows for collective decision-making and capital allocation to projects.

A wider range of investors can join early-stage investments. Investment DAOs offer platforms for knowledge sharing and due diligence. This leads to more informed decision-making. Decentralized governance replaces traditional middlemen in these organizations. Investment DAOs have the potential to change the VC industry significantly, promoting innovation and growth for startups inclusively and cooperatively.

More about this topic

Traditional Venture Capital vs Investment DAO

Traditional vs VC Investment DAO (DAOs in Venture Capital)

Success Stories

DAOs in venture capital have made a mark through various success stories, showcasing DAOs' transformative potential in venture capital for innovative projects funding.

MetaCartel Ventures, a pioneering investment DAO, invested in multiple blockchain startups. Their group approach evaluates opportunities, offers guidance, and utilizes networks to fast-track portfolio companies' growth.

Syndicate DAO is known for decentralized finance investments. With group decision-making and thorough research, they've backed Aave, Uniswap, and Compound projects, advancing the DeFi ecosystem.

OrangeDAO is a venture fund of past, present, and future Y Combinator founders who specialize in crypto. Orange DAO also helps startups apply to, and be accepted into Y Combinator, while helping mentor their leadership and recruit talent, and acquire customers.

The LAO, one of the first legal decentralized venture funds, has invested in numerous projects like NFT platforms, decentralized social networks, and blockchain infrastructure projects.

DAO.vc is a decentralized autonomous entity that acts as a service for a pool governed by shared voting on investment projects chosen using a predefined algorithm. 

SeedClub is a DAO that builds and invests in communities. The mission of Seed Club is to assist web3 community builders. They are creating a future in which the value created by online communities is captured by people rather than platforms. 

These achievements underline how investment DAOs disrupted traditional models by offering a more inclusive and decentralized platform. Investment DAOs have proven their capability to detect and support groundbreaking startups, redefining the future of venture capital.

Potential for Future Growth and Expansion of DAO-driven Venture Capital

The future of DAOs in venture capital and funding looks promising. As blockchain technology continues to mature, DAOs are likely to become more robust, secure, and user-friendly, attracting more participation from both investors and entrepreneurs. Furthermore, regulatory clarity around DAOs could also propel their growth in venture capital.

In the future, we may see more venture capital firms incorporating DAO structures to give their investors more direct control over their investments. We may also see more startups choosing to raise funds through DAOs instead of traditional venture capital, due to the transparency, global access, and democratized decision-making that DAOs offer.

Another potential area of growth is the integration of DAOs with DeFi (Decentralized Finance) platforms. This could open up even more avenues for decentralized funding and provide investors with new ways to earn returns on their investments.

Conclusion

In summary, DAOs are transforming the venture capital sector. They employ blockchain technology and decentralized governance for a new approach. This shift from traditional centralized models results in transparent decisions, inclusive capital access, and creative funding strategies.

Significantly, investment DAOs like MetaCartel Ventures, Syndicate DAO, and The LAO demonstrate the potential of DAOs in venture capital. They have successfully backed various projects, spotlighting their skill in discovering and fostering groundbreaking startups. Their accomplishments highlight the inclusive, transparent, and democratized decision-making offered by DAO-driven venture capital.

As we look forward, the prospects of DAOs in venture capital are bright. With blockchain advancements and changing regulations, DAOs will become more secure and accessible to a broader audience. Increased adoption of DAO structures by venture capital firms and startups is expected, as well as integration with decentralized finance (DeFi) platforms. The transformative power of DAOs is creating a decentralized, inclusive, and transparent system that benefits both entrepreneurs and investors.

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AI in Real Estate: How Does It Support the Housing Market?

Miłosz Mach

18 Mar 2025
AI in Real Estate: How Does It Support the Housing Market?

The digital transformation is reshaping numerous sectors of the economy, and real estate is no exception. By 2025, AI will no longer be a mere gadget but a powerful tool that facilitates customer interactions, streamlines decision-making processes, and optimizes sales operations. Simultaneously, blockchain technology ensures security, transparency, and scalability in transactions. With this article, we launch a series of publications exploring AI in business, focusing today on the application of artificial intelligence within the real estate industry.

AI vs. Tradition: Key Implementations of AI in Real Estate

Designing, selling, and managing properties—traditional methods are increasingly giving way to data-driven decision-making.

Breakthroughs in Customer Service

AI-powered chatbots and virtual assistants are revolutionizing how companies interact with their customers. These tools handle hundreds of inquiries simultaneously, personalize offers, and guide clients through the purchasing process. Implementing AI agents can lead to higher-quality leads for developers and automate responses to most standard customer queries. However, technical challenges in deploying such systems include:

  • Integration with existing real estate databases: Chatbots must have access to up-to-date listings, prices, and availability.
  • Personalization of communication: Systems must adapt their interactions to individual customer needs.
  • Management of industry-specific knowledge: Chatbots require specialized expertise about local real estate markets.

Advanced Data Analysis

Cognitive AI systems utilize deep learning to analyze complex relationships within the real estate market, such as macroeconomic trends, local zoning plans, and user behavior on social media platforms. Deploying such solutions necessitates:

  • Collecting high-quality historical data.
  • Building infrastructure for real-time data processing.
  • Developing appropriate machine learning models.
  • Continuously monitoring and updating models based on new data.

Intelligent Design

Generative artificial intelligence is revolutionizing architectural design. These advanced algorithms can produce dozens of building design variants that account for site constraints, legal requirements, energy efficiency considerations, and aesthetic preferences.

Optimizing Building Energy Efficiency

Smart building management systems (BMS) leverage AI to optimize energy consumption while maintaining resident comfort. Reinforcement learning algorithms analyze data from temperature, humidity, and air quality sensors to adjust heating, cooling, and ventilation parameters effectively.

Integration of AI with Blockchain in Real Estate

The convergence of AI with blockchain technology opens up new possibilities for the real estate sector. Blockchain is a distributed database where information is stored in immutable "blocks." It ensures transaction security and data transparency while AI analyzes these data points to derive actionable insights. In practice, this means that ownership histories, all transactions, and property modifications are recorded in an unalterable format, with AI aiding in interpreting these records and informing decision-making processes.

AI has the potential to bring significant value to the real estate sector—estimated between $110 billion and $180 billion by experts at McKinsey & Company.

Key development directions over the coming years include:

  • Autonomous negotiation systems: AI agents equipped with game theory strategies capable of conducting complex negotiations.
  • AI in urban planning: Algorithms designed to plan city development and optimize spatial allocation.
  • Property tokenization: Leveraging blockchain technology to divide properties into digital tokens that enable fractional investment opportunities.

Conclusion

For companies today, the question is no longer "if" but "how" to implement AI to maximize benefits and enhance competitiveness. A strategic approach begins with identifying specific business challenges followed by selecting appropriate technologies.

What values could AI potentially bring to your organization?
  • Reduction of operational costs through automation
  • Enhanced customer experience and shorter transaction times
  • Increased accuracy in forecasts and valuations, minimizing business risks
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Want to implement AI in your real estate business?

Nextrope specializes in implementing AI and blockchain solutions tailored to specific business needs. Our expertise allows us to:

  • Create intelligent chatbots that serve customers 24/7
  • Implement analytical systems for property valuation
  • Build secure blockchain solutions for real estate transactions
Schedule a free consultation

Or check out other articles from the "AI in Business" series

AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

Gracjan Prusik

11 Mar 2025
AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

AI Revolution in the Frontend Developer's Workshop

In today's world, programming without AI support means giving up a powerful tool that radically increases a developer's productivity and efficiency. For the modern developer, AI in frontend automation is not just a curiosity, but a key tool that enhances productivity. From automatically generating components, to refactoring, and testing – AI tools are fundamentally changing our daily work, allowing us to focus on the creative aspects of programming instead of the tedious task of writing repetitive code. In this article, I will show how these tools are most commonly used to work faster, smarter, and with greater satisfaction.

This post kicks off a series dedicated to the use of AI in frontend automation, where we will analyze and discuss specific tools, techniques, and practical use cases of AI that help developers in their everyday tasks.

AI in Frontend Automation – How It Helps with Code Refactoring

One of the most common uses of AI is improving code quality and finding errors. These tools can analyze code and suggest optimizations. As a result, we will be able to write code much faster and significantly reduce the risk of human error.

How AI Saves Us from Frustrating Bugs

Imagine this situation: you spend hours debugging an application, not understanding why data isn't being fetched. Everything seems correct, the syntax is fine, yet something isn't working. Often, the problem lies in small details that are hard to catch when reviewing the code.

Let’s take a look at an example:

function fetchData() {
    fetch("htts://jsonplaceholder.typicode.com/posts")
      .then((response) => response.json())
      .then((data) => console.log(data))
      .catch((error) => console.error(error));
}

At first glance, the code looks correct. However, upon running it, no data is retrieved. Why? There’s a typo in the URL – "htts" instead of "https." This is a classic example of an error that could cost a developer hours of frustrating debugging.

When we ask AI to refactor this code, not only will we receive a more readable version using newer patterns (async/await), but also – and most importantly – AI will automatically detect and fix the typo in the URL:

async function fetchPosts() {
    try {
      const response = await fetch(
        "https://jsonplaceholder.typicode.com/posts"
      );
      const data = await response.json();
      console.log(data);
    } catch (error) {
      console.error(error);
    }
}

How AI in Frontend Automation Speeds Up UI Creation

One of the most obvious applications of AI in frontend development is generating UI components. Tools like GitHub Copilot, ChatGPT, or Claude can generate component code based on a short description or an image provided to them.

With these tools, we can create complex user interfaces in just a few seconds. Generating a complete, functional UI component often takes less than a minute. Furthermore, the generated code is typically error-free, includes appropriate animations, and is fully responsive, adapting to different screen sizes. It is important to describe exactly what we expect.

Here’s a view generated by Claude after entering the request: “Based on the loaded data, display posts. The page should be responsive. The main colors are: #CCFF89, #151515, and #E4E4E4.”

Generated posts view

AI in Code Analysis and Understanding

AI can analyze existing code and help understand it, which is particularly useful in large, complex projects or code written by someone else.

Example: Generating a summary of a function's behavior

Let’s assume we have a function for processing user data, the workings of which we don’t understand at first glance. AI can analyze the code and generate a readable explanation:

function processUserData(users) {
  return users
    .filter(user => user.isActive) // Checks the `isActive` value for each user and keeps only the objects where `isActive` is true
    .map(user => ({ 
      id: user.id, // Retrieves the `id` value from each user object
      name: `${user.firstName} ${user.lastName}`, // Creates a new string by combining `firstName` and `lastName`
      email: user.email.toLowerCase(), // Converts the email address to lowercase
    }));
}

In this case, AI not only summarizes the code's functionality but also breaks down individual operations into easier-to-understand segments.

AI in Frontend Automation – Translations and Error Detection

Every frontend developer knows that programming isn’t just about creatively building interfaces—it also involves many repetitive, tedious tasks. One of these is implementing translations for multilingual applications (i18n). Adding translations for each key in JSON files and then verifying them can be time-consuming and error-prone.

However, AI can significantly speed up this process. Using ChatGPT, DeepSeek, or Claude allows for automatic generation of translations for the user interface, as well as detecting linguistic and stylistic errors.

Example:

We have a translation file in JSON format:

{
  "welcome_message": "Welcome to our application!",
  "logout_button": "Log out",
  "error_message": "Something went wrong. Please try again later."
}

AI can automatically generate its Polish version:

{
  "welcome_message": "Witaj w naszej aplikacji!",
  "logout_button": "Wyloguj się",
  "error_message": "Coś poszło nie tak. Spróbuj ponownie później."
}

Moreover, AI can detect spelling errors or inconsistencies in translations. For example, if one part of the application uses "Log out" and another says "Exit," AI can suggest unifying the terminology.

This type of automation not only saves time but also minimizes the risk of human errors. And this is just one example – AI also assists in generating documentation, writing tests, and optimizing performance, which we will discuss in upcoming articles.

Summary

Artificial intelligence is transforming the way frontend developers work daily. From generating components and refactoring code to detecting errors, automating testing, and documentation—AI significantly accelerates and streamlines the development process. Without these tools, we would lose a lot of valuable time, which we certainly want to avoid.

In the next parts of this series, we will cover topics such as:

Stay tuned to keep up with the latest insights!