Ishan Pandey: Hi Eden, welcome to our series “Behind the Startup.” Please tell us about yourself and the story behind New Order?
Eden Dhaliwal: I’ve been working in early-stage venture development as an incubator and investor for over a decade now. I discovered crypto in 2015 and have spent most of my time in crypto as a Partner and Head of Crypto at Outlier Ventures.
Over the past year or so, two things really excited me about the space that led me to start New Order. First, that DeFi is really still in its early days and has tremendous long-term upside.
Secondly, it’s become apparent that capital is not a crucial need for new projects, and builders, especially DeFi builders, are getting tired VCs dumping for quick returns, liquidity providers ‘rug pulling” rewards, and general lack of value provided by ‘investors’.
With New Order, our thesis is that a venture platform should be led by a community of builders that can build a powerful DAO treasury to provide continual and valuable resources for builders.
Our network of DeFi builders will determine what projects get launched to serve the DeFi ecosystem best. It’s effectively a community of DeFi builders backing DeFi builders through community-driven incubation.
Ishan Pandey: Please tell us a little bit about how New Order and how DAO’s, in general, can revolutionize and democratize business?
Eden Dhaliwal: DAOs are in the early stages, but we’re already starting to see the mainstream effects of crowdsourcing intelligence and capital to achieve ambitious goals, most notably Constitution DAO, which put a $40 million bid for the US Constitution.
For example, DAO protocols levels the playing field for people interested in supporting and building DeFi projects and earning contributor rewards in the process.
Decision-making that was once prohibited to people who had access to capital and networks can now be democratized globally to people interested in shaping the future of DeFi.
Decisions are made from the bottom up and governed by the community, with rules enforced through voting on the blockchain.
Ishan Pandey: What are your views on Solana? Is it going to take over Ethereum in terms of usage?
Eden Dhaliwal: There are bull cases and bear cases for both. Ethereum was created years before Solana and had a larger network of decentralized apps and developers. Ethereum has a stronger infrastructure and prioritizes its security.
On the other hand, Solana is attractive to the average user because of the speed and low gas costs required to process a transaction. This makes building on Solana quite attractive at the present moment, especially with the constant influx of more non-crypto native users. In the end, both Ethereum and Solana are effective Layer 1’s and we see a future where both can co-exist.
Ishan Pandey: What advice would you give to entrepreneurs who are looking to raise money?
Eden Dhaliwal: When doing your campaign, think of it as “hiring your investors” because this mindset will allow you to have higher standards and expectations for those you bring to the cap table.
Every investor brings capital and “brand name” so what exactly separates them? Every investor should be providing some sort of value to your business.
Whether they provide access to people you wouldn’t have otherwise, introduce synergies, help you recruit talent or have expertise in a specific vertical, think about why you want to work with them long-term.
Ishan Pandey: The DAO legislation in Wyoming is to take effect from July 2021. Why is it so revolutionary?
Eden Dhaliwal: The state of Wyoming formally recognizing DAOs and granting them the same legal power as LLCs is a breakthrough because it provides legitimacy to what Web3 is building.
DAOs provide a new way of working and this is only the start of this industry.
Ishan Pandey: Following bitcoin, DeFi was introduced as a relatively new concept that is rapidly gaining traction worldwide. Do you think DeFi has the power to alleviate economic hardships and disrupt existing financial systems?
Eden Dhaliwal: Before answering this question, it’s important to note that I think of DeFi as a parallel financial system to TradFi but both can benefit from each other in a hybrid model.
But, to answer your question, DeFi allows users to be their own bank. The current financial system is “centralized” and favours people with a combination of status, wealth and location. What if you need to make a wire transfer on a Sunday?
Too bad, wait until 9AM when your bank opens. What if you look at the lending officer the wrong way? Say goodbye to your loan approval.
DeFi allows users to utilize financial services such as borrowing, lending, and trading regardless of their status, wealth and location. DeFi doesn’t care what you look like or what time it is. It’s always working 24/7, 365 days a year.
Another thing DeFi has introduced is the concept of “money legos,” which means different DeFi Apps can interact with each other to provide you with a combination of services.
This is important because the earning strategies once restricted to those with wealth advisors are now available to anybody in the world with a phone, including the currently unbanked populations.
Ishan Pandey: What qualities do you see in a startup before including it in an Incubation program?
Eden Dhaliwal: For New Order, we’re really looking to the community of DeFi builders to uncover gaps in the eco-system to help accelerate to market. This is how our core team proposed and are now building H2O and Redacted - two of the DAOs first portfolio projects.
They emerged organically from builders coming together and saying we need XYZ. I think ultimately you’d want startups with deep domain expertise proposing solutions to problems they’ve identified, having worked closely to the space. Beyond that, the startup team members’ talent/grit / hustle is paramount to having a successful project.
Ishan Pandey: Decentralized liquidity market protocols eliminate human and institutional intermediaries, replacing them with smart contracts that decide interest rates and lending/borrowing parameters via code. Do you think DeFi should be regulated?
Eden Dhaliwal: This is a loaded question. First off, can we even effectively regulate a global network of computers upon which these contracts are executed? My gut reaction is this will be very difficult.
Capital and resources go where they are treated best and if regulations become too arduous, capital will flee to jurisdictions that are more favourable to working with companies in the space.
Moreover, our goal shouldn’t be to recreate the walled gardens of the current financial system but to look at new, modern ways to manage the same risks that are reflective of the paradigm we are entering.
Ishan Pandey: What are your views on NFTs?
Eden Dhaliwal: NFT’s are anything that is “tokenized” and non-fungible. Non-fungible, meaning “one-of-one,” unique and irreplaceable.
When I describe it like this, it’s clear why the number one application so far has been to create NFT art. But it goes beyond art. The utility extends to examples like tokenizing contracts, merchandise, tickets and access to events. We are only in the infancy of NFT applications.
Ishan Pandey: Do you believe the crypto sector must forsake decentralization in order to build a robust security system. What are your views on DeFi hacks and cybersecurity?
Eden Dhaliwal: If we forsake decentralization, my only worry is that we end up returning to the walled gardens and trust, rent-seeking intermediaries of the past.
Of course, the multi-million dollar hacks and exploits we’ve been seeing are terrible marketing for the space, but it also allows contracts and platforms to be more robust and resilient long term. It’s this process of hardening that over time will allow people to develop more faith in code to house their money.
For instance, look at the almost $144B locked in Gnosis Safe. This was built on the mistakes of the DAO hack from 2016 and countless other mistakes the community has made. As the space further develops, we’ll see new tools emerge like Nexus Mutual for insurance or Kleros for conflict resolution that will round out Web 3.
Ishan Pandey: What new trends do you see in the blockchain industry?
Eden Dhaliwal: Institutionalization and creation of DAO infrastructure is going to be the next trend. For example, we also have plans to build a DApp marketplace, which will be the home for these accelerated projects through New Order.
By leveraging the marketplace, teams will have an in-built stream of users and traders who have tried other Dapps from New Order and this will give them a running start right upon launch.
Moreover, after projects are accelerated through our program, they continue operating in our ecosystem, creating another revenue stream for the DAO, which can be further invested in building the future of DeFi.
The marketplace thus creates a virtuous loop where great products can be found, attracting even more users and investors to participate in New Order’s ecosystem.
Disclaimer: The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence, asking the right questions and equipping readers with better opinions to make informed decisions.
The material does not constitute any investment, financial, or legal advice. Please do your research before investing in any digital assets or tokens, etc. The writer does not have any vested interest in the company.