The Future of Organizations is Decentralized and DAO

Ishan Pandey: Hi Tascha, welcome to our series “Behind the Startup.” Please tell us about yourself and the story behind Alpha Venture DAO?

Tascha: Having been a Berkeley grad, I’ve always been fascinated by the intersection of technology and finance. During my undergraduate years, I spent time exploring financial services through multiple internships ranging from private equity wealth management, private equity, and venture capital, to investment banking. After graduation, I started my career in investment banking servicing tech clients globally before joining a tech company, Tencent, as a product manager and a crypto startup, Band Protocol, as Head of Strategy. During my time there, I headed research on the DeFi space and saw opportunities in yield farming at the onset of DeFi Summer. I then left Band Protocol to found Alpha Finance Lab to become a DeFi lab in 2020.

Before the Finance Lab rebranded and expanded to become Alpha Venture DAO recently, we focused on identifying market gaps in the DeFi space and innovating products to close those gaps. We introduced leveraged yield farming concept to Web3 and launched the first flagship product, Homora, which now spans across 4 different chains and has attracted more than $1.8M in TVL. We also started incubating external projects, including Beta Finance, GuildFi, and pSTAKE Finance, which have gone on to raise from tier-1 VCs and launched successful products and tokens.

However, our beliefs and mission have continued to grow after that. We truly believe in Web3, not just DeFi, and the exponential growth in Web3 development and adoption going forward.

However, the ecosystem and real support to ignite and accommodate this growth are nonexistent. The DAO will close that market gap, create a complete ecosystem and support, and be a hub for building and incubating high-quality Web3 projects.

As a result, our DAO is no longer a token representing 1 project, but a proxy for Web3 innovation.

Ishan Pandey: Please tell us a little bit about Alpha Venture DAO and the Terra ecosystem it thrives on?

Tascha: Our mission is to be a Builders’ DAO, a community of Web3 users, thought leaders, investors, and operators who build and innovate Web3 solutions. Our ecosystem consists of two pillars: build and incubate. We will continue to build in-house projects to capture market demands that dominate their sectors. On the other hand, the incubation part will be more community-driven.

We’ve onboarded 50+ thought leaders and global firms active in Web3 to join our network, such as Amazon AWS, Terra, Multicoin, Jason Choi, Darryl Wang, and individuals from Coinbase, Binance Launchpad, Web3 lawyers, founders of Web3 projects, and many more builders. Our network will be the coach and mentor for incubated projects, focusing on areas that are needed the most and that move the needle for the projects.

Additionally, rather than growing the community from the ground up, incubated projects can tap into our network’s 140k+ community base of active Web3 users and token holders and rapidly bootstrap their own community from day 1. For instance, incubated projects will be able to post volunteer requests for our community to fulfill. Upon contributing, these community members will then get projects’ tokens and build their portfolio as a Web3 contributor. That way, we are turning community members into evangelists and ‘owners’ of the projects.

You can think of the DAO as a decentralized VC with the community as its paycheck.

Ishan Pandey: DAOs address a long-standing governance issue known as the principal-agent dilemma by experts on the subject. What are the most important governance tasks within the DAO ecosystem that must be addressed at the earliest?

Tascha: The DAO space is still nascent and the whole ecosystem is still in trial-and-error mode. That said, there are some great developments in the past 1 year on how decisions are being made.

The beauty of DAO governance is it puts the voting power to the community. However, that also means the way decisions are made is less efficient than in centralized organizations and sometimes less effective if the voting is in the hands of people with wrong motives. The most important governance tasks within the DAOs, therefore, start with onboarding the right people to join the DAO, then ensuring that the right people are aligned on the mission and vision of the project. That may mean dividing people into sub-groups or divisions responsible for areas that they are knowledgeable in. Then, give them the autonomy to make decisions quickly and flexibly without the need to go through DAO-wide voting.

Ishan Pandey: Do you think NFTs have the necessary mettle to generate an adequate ripple in the blockchain industry, especially in terms of returns on investments?

Tascha: NFT and GameFi have been instrumental in bringing more people into the blockchain industry. The use cases of owning digital assets, the cultural element, and the entertainment nature of those two things are easy to understand and grasp. They make blockchain understandable for the general public. However, the value in terms of ROI is less clearcut. The value of NFTs depends on the value of the underlying assets which are harder to quantify. Like any assets with cultural elements, the value typically comes from the community built around the assets and the narratives that the community carries. As buyers of NFTs, it really comes down to assessing the value of the community of those NFTs, similarly to how one would assess any creative assets.

Ishan Pandey: Decentralized systems have had to undergo quite a lot of hardships to keep up with the renowned efficiency and reliability of centralized systems. With the emergence of Web3 and crypto’s technological advancements, do you think decentralized systems will finally be able to overcome all hurdles previously faced by them?

Tascha: Centralized systems have come a long way, but blockchain, which is one part of decentralization, has been around only for 14 years. Definitely, there is a long way to go for the decentralized systems to be equally developed. But I believe that with the pace that Web3 is moving, the best minds globally that the industry has attracted, and the innovation that we’ll see from this space will push forward decentralized systems to reach a stage at which we can achieve the balance of decentralization as well as efficiency and reliability.

Ishan Pandey: According to you, what are the major limitations regarding Dapps and Defi applications running on the Ethereum blockchain?

Tascha: For users, high transaction fees from network congestion and smart contract risks are the most inherent problems. The transaction costs make it inaccessible for small value transactions to take place and prevent many people from using protocols. For developers, development tools are still nascent. Even though Ethereum is the most developer-friendly blockchain with Solidity and Vyper smart contract languages and wide-ranging testing tools from truffle, hardhat, brownie, to Foundry's Forge, it is still a long way to go. More importantly, writing bug-free smart contracts is difficult. Smart contract audit is costly and may not catch everything. Even with smart contract code analyzers, the level of sophistication is not where it needs to be and, of course, not bullet-proof, especially for issues related to economic attacks e.g. flash loans.

Ishan Pandey: Sky Mavis, the Vietnamese firm behind the crypto game Axie Infinity, has revealed that a hacker stole tens of millions of dollars in cryptocurrency from its blockchain. What are your views on the impact of such severe hacks on the crypto ecosystem?

Tascha: I believe hacks, in general, are inevitable. With any industry that attracts trillions of dollars and adoption globally, there exist large opportunities for people to take advantage of. I believe it’s a part of the process that the blockchain industry has to go through to mature and get even more widely adopted. This Axie Infinity incident sheds light on how much more development, security standards, and maintenance are needed on the infrastructure layer such as cross-chain bridge in this case. As there exist opportunities and market gaps, I hope we can attract more talented security developers and researchers going forward to address these problems, close market gaps, and together drive the blockchain industry to a more mature stage.

Ishan Pandey: What does the roadmap ahead look like for Alpha Venture DAO and the entire DAO ecosystem as a whole?

Tascha: The first step of decentralization is the incubation arm. We’re onboarding thought leaders, influencers, experts, operators, and founders with unique skills to join our network, a group of people that represent the best mind share in Web3, who will mentor incubated projects and help them build and scale into a billion-dollar project. On the other hand, Web3 users can also join our community to start contributing to these highly curated incubated projects as well.

In the future, we will decentralize decision-making on the building arm of our network, particularly on product parameters and features, followed by decentralized governance of the DAO as a whole. We believe that decentralization should not happen without the ability to get things done and the ability to make good decisions. That’s why we choose to carefully decentralize in multiple phases and focus on onboarding high-quality members of Web3 to join our DAO as the initial step.

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