Domain Fund 1.0
DomainFund is a tokenized investment entity that acquires, monetizes and divests of domain name assets in order to create significant value and data for investors, contributors and asset owners. DomainFund uses an integrated tech stack using interoperable and composible blockchain platforms and distributed business networks creating a powerful network of URL and TLD assets.
Executive Summary
DomainFund acquires full rights and fraction options with premium underutilized URL and domain assets. Each acquisition is executed based on a number of variables collectively agreed on by a majority of the managing members of the fund. Variables include :
Opportunity / Domain Fund Strategy
The core asset behind Domain Fund acquisitions will be a combination of technology and human experience from industry professionals with a key emphasis on building technology required to analyze the 40,000 auctions every day and find aftermarket opportunities below market value.
Narrow down and define the best acquisition opportunities from pre-release and deleting names based on a wide set of custom filters including domain age, keywords, page rank, character length, brand value, competitive extensions and much more.
Leveraging is parent company custom build operating system, VNOC, along with its Contribution platform CONTRIB will add utility and distribution value aligned with new assets entering the network with new digital assets accepted into the Fund.
Strength of the Fund
The DomainFund is managed by several industry professionals who have experience in the acquisition and divestment of over $100 million dollars in domain names providing the human element needed to work alongside the technology and systems powering DomainFund.
Weaknesses/Risks
Every investment has risk including market timing, economic changes and more. However, the collective experience of the managing members here greatly reduce this risk and the returns proposed are far less than many individuals actively engaged in this business achieve year after year. With a focus on fractional ownership and liquidity, potential risked include asset market dynamics shifting away from digital native assets in URL’s.
Proposed Financial Investment
DomainFund is raising its first fund of $10,000,000. DomainFund 1.0 has a 5 year time frame with a focus on cash flow, value and a sustainable operating model to extend the flexibility, utility and effectiveness of the digital asset portfolio.
General Allocation Proposal-
$2m - TLDs
$2m - Drops
$2m- Aftermarket / Broker
$2m- Lease/options with large portfolios
$1m- Reserve
$1m- Ops
Monetization
All proposed asset acquisitions will be rated by the managing members on the domain name’s value for monetization through a variety of channels including but not limited to:
Acquisition Strategies
-Drop Catch Systems (godaddy, dropcatch,namejet)
-Lead Brokers
-Lease / Options Structures
-Seeking Premiums, Traffic and Brand/vertical domains
DomainFund will partner with the best teams around the world to execute on creating value and building a sustainable and relevant business with DomainFund Assets.
Challenges-
Finding a good model/structure that would be mutually beneficial and hedge risk/reward for all parties involved.
Developing and integrating Domain Drop and Registration Systems- Integrating 5 drop systems, API's from registration companies, Data analysis programs, Integration into auto post to all auction houses, increase sales process and forms.
Welcome to the DomainFund Documents!
This is an evolving document designed to convey the most up-to-date information regarding the DomainFund. Due to the nature of the DomainFund as a collectively-managed investment vehicle, however, it is possible that it may not always reflect the most recent developments or decisions that have occurred. For the latest updates and to participate in the conversation, please be sure to visit the fund's Telegram server.
DomainFund Collective
DomainFund is a collective of domain asset owners, builders and entrepreneurs that have come together to acquire premium domain names and TLD’s. We are a collaboratively-owned investment vehicle that funds community-led and URL/ TLD projects.
DomainFund carries out Snapshot voting using its DomainFund token so that our members are able to participate in investment and fund decisions. Funds are distributed using a multisig wallet, controlled by major, known participants in the cryptocurrency economy.
A new breed of digital assets are emerging out of decentralized, blockchain technology while web1 centralized digital native assets are benefiting from new capabilities to extract value. Cryptocurrency-based digital native platforms that empower communities represent a new breed of owners that has the potential to solve many of the industry's underlying problems, create liquidity in real time and open up unlocked value in premium Domain names and TLD’s.
DomainFund believes the opportunity is now to aggregate a large group of independent URL owners and acquire on the open market to acquire, build and manage a world leading portfolio of premium digital native URL/TLD assets. The foundation of URL’s give DomainFund the opportunity to quickly move across various markets with a focus on execution, time compression and effectiveness with the domain portfolio.
Decentralized Autonomous Organizations (DAOs)
DAOs are organizations governed through the interaction of their members with smart contracts. This use of smart contacts allows for greater efficiency in decision making by preserving mutually-agreed parameters that are mandated and then followed until such a time that code is changed by popular consent. Through the participation of an involved community of investors, the DomainFund provides the checks and balances necessary to run a successful fund.
DomainFund DAO and Treasury
DomainFund is organized as a legal entity (a Delaware limited liability company). The DAOs funds are held within a "multisig" (multiple-signature) "treasury" contract for reasons of security and efficiency.
For this treasury, Gnosis Safes have been created on Ethereum mainnet.
Gnosis Safes were chosen as it allows the DomainFund to customize how the the assets contained are controlled by predefining the number of signatures required from particular wallets in order to confirm a transaction. In the DomainFund's case, it is necessary for 3 of 5 registered wallets to confirm a transaction before it is executed.
The signers of the treasury multi sigs and the number required to execute transactions have been chosen based on the desire to combine security with the ability to act quickly. The identities of all signers are known and each are in a position that would highly disincentivize malicious behavior. The signers are:
Tax Situation
Each member of the DomainFund is responsible for ensuring they follow their own jurisdiction's relevant tax regulations in regards to joining the fund and when accounting for any outcome of its investments.
DomainFund Formation
At launch, prospective members are able to contribute funds in DAI, USDC, ETH, BTC during a deposit period. Once the deposit period ends, the first capital raise is considered complete. Subsequent to their receipt, contributions made to the fund will then progressively be allocated to investments assets, resulting in their transfer out of the fund's control in exchange for other digital assets or promissory notes that constitute its investments.
The DomainFund Token
Fund members participate in the decision making process by voting from accounts holding these tokens, with vote weight being a function of the number of DomainFund tokens held (proportional to their contribution to the fund).
Know Your Customer (KYC)
Members of the DomainFund will be required to complete KYC requirements for the purpose of anti-money laundering and sign an DomainFund Fund Agreement. The KYC process entails:
Voting Rights
In order for an investment to be made a proposal must first be passed so that capital may be released from the DAO treasury. Proposals are passed by means of a vote. Voting weight on Snapshot is based on the total number of RDAO tokens held by each member's Ethereum account.
The percentage of the total supply of RDAO tokens that need to participate in a vote for it to be considered valid (quorum) is dependent upon the amount of the investment. For example:
Once a vote is passed, a multisig transaction can then be prepared that will fulfill the investment. This multisig smart contract is to be under the authority of several elected members of the fund chosen for their known status lending them credibility and disincentivizing malicious behavior.
Voting Requirements
While quorum implies that it is not necessary for all fund members to vote, it is highly encouraged that they do so once their own due diligence has been carried out on a proposed investment. Not only will voting regularly serve to improve an individual participant's reputation, failure to vote could prompt consideration of the expulsion of a non-participant from the DAO.
Vote Delegation
Temporary vote delegation may be made available but will need to be evaluated to ensure it does not become a long term approach to fund participation.
Non-Investment Votes
Proposals may be made for activities that do not fall within the usual definition of investing. For example, the fund could choose to release positions, remove members, change practices or to designate funds toward sponsorship of events or activities, amongst other things. It is only necessary that a proposal achieve a clear majority during the voting process and attract the participation of the majority of members.
The vast majority of proposals put before DomainFund members will relate to potential investments. As the fund is member managed and directed, all members will be free to propose an investment following a reasonable period of their own evaluation. While a project may wish to appeal directly to the fund for investment, it is necessary that they first receive the backing of a member. This member would then work with them on an Investment Proposal and potentially facilitate their participation in a fund call in order to present their offering.
Investment Proposal Document
An Investment Proposal constitutes approximately one page of details summarizing the project to be invested in, its value proposition, the anticipated outcomes and timescales of an investment. It would also state a realistic set of terms for the investment, as well as by what means those terms would be achieved. These points can be summarized as follows:
Though providing a reasonable summary, an Investment Proposal document serves primarily as an introduction to the proposal and does not constitute it in its entirety. It will, however, be kept as a record of the fund's activities.
Investment Call
The primary forum for presenting an investment opportunity will be one of the regular fund calls attended by as many DomainFund members as possible. The writer of the proposal will be expected to present the information contained therein along with any additional pertinent information. This presentation could be done in collaboration with the project to be invested in itself. Once this pitch is complete, fund members will then have the opportunity to ask any questions or raise any concerns they may have regarding the investment or its terms. Similarly to how Investment Proposal documents are kept as records, the minutes of these calls will also be kept by the fund in order to allow members to refer back to them.
Rather than simply being an investment DAO, the DomainFund aims to become the premier resource for entrepreneurs and builders in the crypto-enabled creator economy. It is necessary to acknowledge the work of our members in a variety of ways, especially those who conduct vital outreach, bring new and exciting projects to the DAO, and assist them in achieving success. In order to incentivize active engagement and motivate members to carry out tasks on behalf of the fund, an NFT/POAP-based Referral and Reward Program will be implemented.
POAP Rewards for Participation
POAPs, through their ability as NFTs to serve as a source of recognition that may also be integrated with applications such as the DomainFund Discord, provide a useful means of acknowledging and attributing special abilities to fund members and the wider community. As such, a variety of specially designed POAPs have been or will soon be made available that are distributed for carrying out specific tasks:
Scout Program
As the sourcing of investment opportunities provides one, if not the most important contributions to the DomainFund and its DAO members, the Scout Program has been designed to streamline and acknowledge this valuable contribution. Members willing to contribute deals/projects for possible investment by the fund send the potential investment’s information to the Operations Manager, who will then work with the Scout to bring it before the rest of the members. The information on the project should include at a minimum:
The Operations Managers then examines the proposed deal, expanding the background research if necessary, and coordinates the necessary formal procedures to move the deal forward. If the deal passes the voting stage with approval, the member who suggested it receives a one-of-a-kind POAP that confirms their role in sourcing that particular deal.
The Scout Program
As an investment vehicle, the DomainFund anticipates that the value of its assets will not remain constant. Members may wish to submit Release Proposals to distribute assets held by the fund to its members, as long as two proposals to distribute assets do not fall within the same calendar month. Any funds chosen to be distributed through a governance vote will be sent to all members proportional to their contribution.
Membership Additions
Members can, by a majority vote, elect to begin a new window of capital commitments to the DomainFund. In order to ensure equality in the voting power granted to RDAO token holders, the number of tokens they receive will take into account changes in the value of the assets held by the fund. This freedom to accept new members is one of its qualities, as, given the fund's Social Token focus, the addition of established and noteworthy members will add value to the fund as a whole.
Membership Removals
Members of the DomainFund may request a member leave through conducting a vote to remove the respective member. The member's proportional equity in the fund (minus any tokens that are still vested) will then be released to them. If the fund holds vested positions then those will be released to the departing member once they become available for distribution.
Voluntary Exit
Members of the DomainFund have the opportunity to leave the fund at set intervals (monthly) through a declaration of intent made publicly and addressed to all other members. At point of exit, the departing member will receive their proportion of the original and unallocated capital contribution, as well as a relative share of the fund's capital held in other assets. If fund assets include those that are not immediately accessible, then they will be distributed to the existing member at the first available opportunity.
In principle, the members of DomainFund are responsible for the costs and expenses related to its activities, operations, and maintenance. Where necessary, fees will be payable on a quarterly basis following a Fee Proposal being submitted to members and passed in an on-chain vote.
A proposal could be made to change aspects of the way in which the DomainFund is managed in its entirely, distributing the entirety of its assets on a pro-rata basis. The fund could also be closed for an external reason, such as a judicially ordered dissolution or disposition of all the assets. If expenses are incurred as a result of closure these are accounted for prior to the release of assets. While investing may cease, a fund closure will only be considered complete once all mutually managed assets are released.
Contact Details: DomainFund.com, contact chad@globalventures.com for more details.