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TLDR: Investment firms participated in ShapeShift DAO’s latest fundraise using Success Tokens minted with UMA; this represents one of the industry’s first “DeFi native” raises, with disintermediated smart contracts replacing legal contract enforcement.
A VC direct-to-DAO raise
ShapeShift DAO, a decentralized, non-custodial cryptocurrency platform together with UMA are announcing the strategic investment by Coinbase Ventures and Chapter One in a significant portion of the Shapeshift DAO’s recently minted FOX success tokens.
These investments mark a key mobilization of UMA’s success tokens in general, and the FOX success token in specific, with large, stable investment organizations.
Since 2014, ShapeShift has been pioneering self-custody for digital asset trading. The company’s web and mobile platforms allow users worldwide to safely buy, hold, trade and interact with digital assets such as Bitcoin and Ethereum.
Strategic investments help to expand DeFi universe
The success token investments will help ShapeShift Dao to achieve their mission of providing the world with an open-source, community-owned interface to the expanding DeFi universe.
Engineered by UMA, success tokens provide a way for DAOs to raise funds from long-term strategic investors without the need to sell tokens at a steep discount. The tokens provide an innovative alternative to the traditional way of fundraising in crypto.
Instead of selling tokens at a discount upfront, investors are instead given an option to earn more tokens when an objective is reached. This DeFi primitive makes fundraising transparent and helps align the interest of the entire community.
Success Tokens use UMA’s Optimistic Oracle for resolution. UMA’s OO is able to power multiple DAO treasury management tools due to the flexibility to query precise pieces of data and trust they are accurate.
This is one of the first times that major VCs have relied on a crypto native smart contract in place of a legal contract, which is typically a “SAFT”, or Simple Agreement for Future Tokens. SAFTs require accountable legal entities, such as foundations or team founders, and are paid out under legal requirements. They are not well suited to investing in DAOs, which do not have legal entities.
The Strike Price for the Fox Success Token is $0.8 FOX/USD, and each Success Token is backed by 2 FOX. At expiry, if FOX/USD < $0.8, each Success Token is worth 1 FOX. At expiry, if FOX/USD > $0.8, each Success Token is worth 1 FOX + (expiry FOX/USD price — 0.8)/expiry price.
The token vests/expires on March 1, 2024.
Learn more about how your DAO or protocol could leverage the fund raising benefits of success tokens by visiting here.
UMA-engineered Fox success tokens draw Coinbase Ventures and Chapter One investment was originally published in UMA Project on Medium, where people are continuing the conversation by highlighting and responding to this story.
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