Major players in the fast-growing decentralized finance (DeFi) space have launched AladdinDAO, a decentralized wealth management marketplace designed to help new or less-informed investors generate returns through liquidity extraction.
The project is being led by a former Huobi executive and includes participation from investors including Multicoin Capital and Polychain Capital, according to a press release.
Under the plan, DAO committee members will select the “most promising” DeFi projects.
“Yield farmers self-distribute their funds to the vetted DeFi projects while incentivizing them for liquidity mining rewards,” the press release reads.
The protocol’s 15 so-called talent hunters — the first members of the Aladdin Committee — include executives from Polychain Capital, Digital Currency Group, Multicoin Capital, and Alameda. These founding members can later add new members by invitation. (CoinDesk is an independent subsidiary of Digital Currency Group.)
“DAOs are one of the most important innovations in the entire crypto space,” Olaf Carlson-Wee, founder of Polychain Capital, said in the press release. “Over time, they will take over and decentralize large parts of the entire economy.”
AladdinDAO’s native token, the Aladdin Token (ALD), is designed in part as an incentive for committee members to select and vote for the best projects, according to the protocol’s white paper reviewed by CoinDesk.
According to the white paper, the DAO mining mechanism provides committee members with an incentive to choose high-quality DeFi liquidity mining schemes after thorough research.
The DAO mining rewards are paid out every two weeks, which according to Sharlyn Wu, one of the founding members, is to avoid liquidity pump-and-dump incidents.
According to the whitepaper, the vast majority of ALD tokens are distributed for liquidity mining. Of these, 30% are for mining users, 31% for DAO mining, 30% for founding members and community members, and 9% for “DAO Reserve”.
“The smarter the DAO is, the better decisions it can make and the higher quality projects and liquidity the platform can attract,” said Wu, now the main contributor of AladdinDAO, in the press release. “This is a self-reinforcing cycle as the stronger the platform becomes, the more pricing power it gains, the more value DAO tokens can achieve.”
The former banker ran the blockchain investment division at China Merchant Bank International (CMBI) before becoming chief investment officer at crypto exchange Huobi, where he led the DeFi effort.
In an interview with CoinDesk, Wu said she chose AladdinDAO as her first project after leaving Huobi because she saw the benefits of decentralized autonomous organizations (DAOs) after spending her career at large, centralized financial institutions.
“I want to work and live freestyle, and I still want to network and evolve with the other smart people in the crypto world,” Wu said. “I made this for myself and it offers me a new lifestyle of working and living in the crypto world. Hopefully this can be the platform for many other smart and talented people.”
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