After years of operating as a traditional investment syndicate, Vanta is in the process of transitioning into a fully decentralized autonomous organization (DAO).
As it embarks on the path to progressive decentralization, it’s seeking to preserve the cooperative spirit of its origins while avoiding the common issues and challenges encountered by other investment DAOs.
To that end, Vanta has teamed up with Decent DAO, a DAO consultancy and platform that enables smart contract protocols to progressively decentralize their governance and operations.
“The thing that we wanted to do differently than most traditional investment DAOs is that we wanted to keep that same spirit of a syndicate alive,” Vanta DAO founder Josh Field explained in a recent interview with Maverick Kuhn, Entrepreneur In Residence at Decent Labs.
“Honestly, I haven’t seen a lot of really true investment DAOs work as intended,” Field said. He explained that in many investment DAOs, “things would get hairy,” with individuals withdrawing from the DAO after being outvoted on particular deals, while there were no incentive mechanisms in place to reward “people that were bringing in all the deal flow.”
VANTA has provided various 10x returns since inception in June 2021, deploying over $12.5 million dollars.
And now we’re decentralizing into a DAO, with the help of @decentdao
Here’s how we’re doing it in 5 phases: pic.twitter.com/EyleQL85gX
— VANTA (@vanta_club) June 17, 2024
The idea behind Vanta DAO was to token gate membership through NFTs, while raising money for a treasury used to hire vendors, analysts and researchers to support the DAO—enabling the syndicate DAO to “operate in perpetuity,” while “anyone could come in and out of the DAO at any time” by buying or selling a membership NFT. “They could decide, based on how many NFTs they held, how much allocation they were going to invest in certain deals,” Field said.
Decent DAO came on board with a bespoke, white labeled solution for Vanta DAO, Field said. Their “realistic” approach to decentralization was a big draw, he explained. “While I agree with full decentralization, I also understand that it doesn’t work if you just go gung ho, everything’s decentralized from day one,” he said. The idea with Vanta DAO, he said, is “to be more decentralized than we were yesterday, and we want to do that in a way where there’s still a level of competency that remains as we move through that process.”
Governance roles
To achieve this, Vanta DAO incorporated a set of governance roles and structures with the help of Decent DAO. The DAO established three core roles, each intended to manage specific aspects of governance and investment flow.
The first role, the Vanta Lead Analyst, serves as the primary research and community engagement point. This individual works closely with investment teams, produces research, and connects with project founders on behalf of the DAO. As a full-time position with a renewable six-month term, this role ensures continuity and professional oversight of Vanta’s investments.”Having someone that can just sit in with these people, connect with them, catch up with them… that’s important,” said Field.
Deal Scouts are another essential role within Vanta’s structure. Selected professionals from within the crypto space, including founders, venture capitalists, and thought leaders, are tasked with sourcing and vetting potential investment opportunities. They receive compensation through token-based fees generated by successful deals. Vanta limits this role to a small number of scouts, ensuring a high standard of expertise and allowing quality control over the projects that enter the DAO.
The final role is the Vanta Council, a group of five experienced members elected every six months. The Council proposes governance changes and manages key organizational decisions. Council members can propose initiatives that the broader community can vote on, such as event funding or new investment structures. This setup fosters accountability, with Council members subject to re-election and replacement based on their performance and community satisfaction.
The roles are managed through elections, with the winner assigned an NFT that affords them the necessary functions and privileges. “After six months, it’s no longer active, the new election takes place, and you have to win the election again to earn that role,” Field explained.
A customer-centric approach
Using Decent DAO’s platform and tooling, Vanta was able to customize governance mechanisms to suit its needs. Decent’s customer-centric approach allowed Vanta to avoid issues that can arise when DAOs are too decentralized too quickly, Field explained, such as decision-making bottlenecks and a lack of strategic direction. This tailored approach includes features like whitelisting NFTs for role-based permissions, ensuring that governance roles can be filled transparently and efficiently.
The partnership with Decent DAO has helped Vanta to maintain a balance between decentralization and operational efficiency, Field said. “You really do get something bespoke with Decent,” he said, explaining that “they’re always thinking of new things, and it doesn’t have to be overcomplicated.” Stressing the importance of an accessible governance framework that effectively serves the DAO’s mission, Field added that, “We’re committed to keeping things simple, seamless, and functional.”
