The Sarcophagus DAO is happy to announce the closing of its $1.8m initial funding round led by Placeholder Ventures, with participation from Greenfield One, Blockchain.com Ventures, Coral Defi, Luis Cuende (Aragon), and Kain Warwick (Synthetix).
This is a major milestone in our efforts as a collective DAO. This funding will supercharge our ability to deliver on the promise of a truly decentralized and robust dead man’s switch; something that has never existed in the past.
One may ask: Why would a decentralized project raise money from VCs when it is mechanically possible to raise money on the open market? There are two reasons: 1. Leadership, 2. Labor.
Any project of consequence needs leaders, and we think that by working with some of the most experienced and intelligent people in the space, we can vastly improve our chances of success. This is a DAO, there are no dictators, but that does not mean that there are no leaders. Every single investor in the Sarcophagus DAO is well versed in DAO economics and had to interact directly with several on-chain contracts to complete the placement (more on structure later).
There is plenty of money floating around crypto land right now, but as always there are very few people that truly understand what is happening under the surface. We optimized for expertise and experience, not valuation or round size.
A DAO is a collection of people working independently towards a common goal. The more people that are working towards that goal, the better. By bringing on technically savvy investors, we are also bringing on teams that are highly incentivized to help not just fund the project, but to be the first to operate it’s core infrastructure.
The funding round was completed by using a whitelisted SARCO/USDC swap contract (pioneered by Lido), funded with $SARCO tokens as the result of a DAO vote, and a General Purpose ERC20 linear vesting contract.
Here’s how it works:
The swap contract with whitelisted addresses + allocations is launched and the start function is called: https://etherscan.io/address/0x08cbe2703b030432bcc6ce5950b465186502e610
The DAO votes to fund the swap contract with the amount of tokens agreed upon with the investors, the documents and allocations are also linked to the vote via Arweave: https://client.aragon.org/#/sarcophagus/0xf483c1f7858dd19915d0689d26cb3487fc90b640/vote/5/
Once the vote passes, there is a 30 day window where the whitelisted addresses are able to perform the swap.
When each investor performs the swap, their tokens are sent to a general purpose vesting contract https://etherscan.io/address/0x8727c592f28f10b42eb0914a7f6a5885823794c0 with a two year vesting period. The tokens are unlocked linearly and the investor can claim them whenever they like.
If there are any leftover tokens from investors that were whitelisted but failed to make the swap for any reason within the timeframe, those tokens are recovered back into the DAO.
What We Learned
It’s hard to be the first to try something, there is an excise amount of labor and testing that needs to happen. Luckily the field we are working in is the most transparent and helpful in the world. We were able to reach out to other teams who have done similar things and get their advice, we were also lucky enough to be working on a project that investors will do more work than normal to participate in.
A few things that we will keep in mind for the next funding round:
Requiring investors to perform semi-complex on-chain actions is one of the best sorting functions for future partners. If an investor balked at the idea of using a swap contract + DAO vote it was easy to spot the red flag and end discussions.
Investors aren’t used to all getting the same deal. It took a lot of coordination and waterfall style work to get all of the participants aligned on a single set of documents and economics.
Good investors don’t care about long lockups, they care about ability to participate in network activities in order to double-down on their thesis.
Building! Lots of improvements coming to the project including L2 support. Please join the Discord and Telegram channels for announcements about future incentives for both dead man’s switch creators (Embalmers) and node operators (Archaeologists) coming shortly.