A Hybrid Solution for Decentralized Investment

Blog

unique.vc

- 17/08/2022

A Hybrid Solution for decentralized Investment


How can investors make the most of both centralized and decentralized organizations? In the last couple of years, digital investment has witnessed a fruitful development, confidently mapped out by the ease and convenience of blockchain based DAOs (Decentralized Autonomous Organizations).

While the decentralized investment workframe has several advantages, operating as a fully decentralized system also exposes the members and the entire organization to certain risks and roadblocks that need to be addressed. Events in the Web3 space might point out that the better road to travel could be a hybrid approach — a decentralized autonomous organization hosted by a larger, growth oriented platform that empowers investors to reach their goals.

The Nuance of Decision Making

One of the things making web3 organizations a great investment solution is the decentralization of operations and decision making. An on-chain encrypted venture club is structured so that it follows the collective’s purpose and interest. Decisions are taken automatically or collectively by everybody in the group. While this works great a lot of the time, there are instances when decision making becomes more nuanced than choosing between black or white. This is simply because life in general and specifically investment will often pose challenges that don’t always have a simple, binary answer.

Investment decisions, the nature and the value of certain assets are all entangled in a much larger financial landscape. There always are several factors at play when making investment decisions — whether you act alone or together with an investment group. Moreover, time is always an important factor. Therefore, it can become hard or impossible for an algorithm to make the best decisions that would benefit the organization in the long run.

Taking politics and human error out of the management process is one of the things making web3 investment clubs a more agile investment solution. But the truth is, sometimes another layer of governance is the right approach against uncertainty. Depending on the purpose and system of each organization, right now, no algorithm can fully act as truly autonomous in any circumstance. No AI or quantum computer can precisely map out the future in detail. The unpredictability of life and business might call for a hybrid approach in running these organizations: decentralized investment clubs hosted by a larger system like Unique Venture Clubs — to foster growth, offer security and facilitate investment with the right tools and technology.

Security & Operations Efficiency

In recent years, certain events with established web3 organizations exposed a series of vulnerabilities that need to be addressed. In 2020, a fault in the MakerDAO’s protocol led to a leak, causing users to lose $8.3 million. Few years earlier, in 2016, the first DAO ever created got hacked, holding 15% of the entire Ether supply at the time. In both cases, under the premise that both organizations were fully decentralized and permissionless (MakerDAO), nobody was held accountable and funds were not retrieved.

Going forward, digital investment will only be sustainable if it can guarantee protection and efficiency. A safe investment climate is mandatory for maintaining public trust and a fruitful economic collective adventure.

At the moment, all signs point towards a hybrid approach as the best solution for blockchain native investment clubs. Platforms like Unique Venture Clubs — a recently established dApp — can now offer the best of both worlds.

The Best of Both Worlds

By being hosted on the Unique Venture Clubs infrastructure, digital investment clubs can now benefit from decentralized investment, while also being protected and fostered by the native system on which the Clubs are built. This brings a number of convenient features to any digital venture club:

  • Cybersecurity and protection offered by being built on a larger, centralized and secure platform
  • Ground-breaking management tools offering a superior collective investment experience
  • More efficiency in executive operations
  • Better access to financing using Unique Venture Clubs’ platform for pooling funds

As the decentralized approach is bringing so much opportunity for digital investment, being completely on your own out there can be both challenging and inefficient. The benefits of on-chain encrypted governance must be mixed with the convenience and performance of platforms like Unique Venture Clubs to attain an agile investment club that fully serves the purpose. Having the ability to respond to changes and adapt is now facilitated by organizations like UNQ — where any collective investment can leverage the platform to their advantage.

The Future of Investment Is Hybrid

Smart contracts can instantly buy or sell assets but the truth is, digital investment is a much more complex journey. In challenging times and situations, investors will need the best workframe and tools they can get. Unique Venture Clubs is offering the perfect digital investment medium where participants can easily follow their goal.

The platform offers a democratic environment where users can govern their Venture Clubs with flexibility and autonomy and at the same time, benefit from the powerful tools and security the platform offers. A new hybrid model is emerging where collective investment is being channeled to new heights by the best solutions from both decentralized and centralized systems. Performance means adapting to changes and choosing what’s best for the common purpose. When that becomes a challenge in itself, we must wisely choose the best partners and look for more innovation in the space.

You can now test this hybrid solution as Unique.vc Public Beta has been launched. Make sure to take advantage of all the tools and features offered by the platform.

Check it out at https://beta.unique.vc/

Subscribe to our newsletter

Don’t miss out on any updates on our platform and stay up to date with the latest trends in the Web3 industry.

Read more

Staking UNQ Tokens Guide

Guides

Staking UNQ Tokens Guide

Read our Step by Step Guide on how to Stake UNQ Tokens on Unique.vc platform.
The Challenge of Protocol DAOs

Blog

The Challenge of Protocol DAOs — And A Better Way Forward

Modern investors need a safe platform where they can focus on performance and not worry about security issues and lack
Investment Clubs Legal & Compliance Framework

Blog

Investment Clubs — Legal & Compliance Framework

An important thing to keep in mind is that venture clubs do not need a legal entity, neither KYC nor