New ways for organizing investment funds on blockchain

Blockchain and DAO technologies offer many interesting opportunities in terms of organizing various investment structures, funds and corporations, management and reporting mechanisms, concluding transactions and making settlements. They have a serious potential to significantly change the conservative world of corporate governance.

Traditional corporations and investment funds have well-established forms, business practices and fixed regulations. So far, they do not use the advantages offered by new technologies, since they have not been studied by the global business community yet.

We propose the creation of a workable Investment DAO model that uses innovative approaches to managing investment organizations, and allows to invest cryptocurrency in various assets, primarily in assets of the "real world”.

Below are some differences between the proposed DAO model and the legacy corporation or investment fund, where decisions are made by the CEO or GP (general partner):

QUESTIONS/ DIFFERENCES	Legacy corporation or fund	JMC DAO
1. Who makes investment decisions?	CEO / GP - When transferring money to a fund or buying shares of a corporation, investors lose control over investment decisions. - In case of disagreement with the capital call of the fund, investors can be penalized.	Investors - Transfer of funds to DAO treasury doesn’t imply automatic approval of any investment decision - Investors can block investment decision or rage-quit from DAO
2. Who has control over transfer of funds?	СEO / GP	Investors - Technically, no one can spend investor funds without their consent
3. Can managers be replaced, their bonus changed?	No - Unlikely, too complicated	Yes - DAO-fund structure is supposedly much cheaper
4. Reporting	- Regular (quarterly or annual) - Can be changed in the intervals between the reporting data	- Publicly available on a blockchain in real time on every transaction - Can’t be changed
5. Do smaller investors’ votes count?	No - Reaching out to the CEO and other shareholders is complex and just unlikely. - Shareholders can sell their shares back to the company only on rare occasions of disagreement with select decisions on annual general meetings.	Yes, any DAO member at any time can: - Reach out to the DAO community or any its member and raise any issue or express concern publicly - Put up any matter to the DAO Voting - Quit DAO in case of disagreement with any decision

In addition, at the moment there are no ready-made software solutions that allow cryptocurrency investments in "real world" assets, taking into account established business practices. Such tasks could be performed by DAO, but so far, they are in the early stage of their development, as they raise many questions and have a set of specific risks. The available solutions based on multisig wallets (cryptocurrency wallets with multiple transaction signers) have limited functionality and are far behind the needs of most modern organizations.