Investing in cryptocurrencies always seems like a daunting task for users worldwide, more so when aiming to secure early-stage allocations in crypto startups. Stacker Ventures, a venture DAO, is transforming this narrative for the better, democratizing early-phase investments in emerging assets. Effective immediately, the DAO has also launched a line of what it calls “Active Yield Funds”.
The Stacker Ventures Mission
There is a big gap between mainstream investors and VCs regarding blockchain and crypto investment opportunities. In many cases, VCs get “exclusive access” before anyone, leading to significant missed opportunities. Although this is not uncommon in the broader technology sector, it does leave a lot to be desired. Stacker Ventures aims to empower all investors equally through its community-driven capital management protocol and managed yield farms.
With the backing of renowned crypto VC firms and the launch of its Venture Fund 1, anyone with an Ethereum wallet can get involved. Stacker Ventures primarily focuses on up-and-coming DeFi and Web 3.0 projects offering ERC-20 tokens with user-side utility. However, it is not just about providing the necessary capital to startups. Stacker Ventures also wants projects to tap into a community of advisors, analysts, testers, and market professionals who prioritize long-term success.
At its core, Stacker Ventures smartly manages pooled capital on the Ethereum blockchain. Instead of opting for a top-down structure, the project is structured as a DAO, in a bid to empower the community and democratize access to significant capital opportunities. The DAO will also oversee its very own Active Yield Funds, focused on generating compelling APY through exposure to the decentralized finance market.
What Venture Fund 1 Does Differently
The launch of Venture Fund 1 – the first fund allowing Etheruem wallet owners to act as VCs in the blockchain space – paints an example of what the future may look like. Not only does it bring early-stage investment opportunities to a much broader group of enthusiasts and investors, but it also provides incentives and aligns community interests.
Having the ability to voice one’s opinion on capital deployment, fund management, and project acceleration is what separates Stacker Ventures from traditional VC investing. Stacker Ventures hopes to build long-term and mutually-beneficial partnerships by providing valuable knowledge and community-fuelled help and testing.
Taking Venture Fund 1 as an example, it provides development teams with early-stage financing needed to amplify their impact and reach. With $10 million in soft and hard commitments to date, Stacker Ventures’ approach is destined to serve as a viable approach to early-stage funding.
Introducing the Active Yield Funds
Stacker Venture is further establishing its unique market position through its Active Yield Funds – a safe and transparent gateway to the highest investment-grade yields in the world of decentralized finance. Users can deposit ETH, USDC, and WBTC into these managed yield-seeking funds, earning significant APYs. Unlike traditional DeFi solutions – which are mainly centralized in nature – the Active Yield Funds rely on decentralized capital control at all times. Investors can gain safe exposure to much higher yields, typically inaccessible due to high gas costs or the need for ongoing management.
By pooling capital in a decentralized manner, the managing farmers responsible for each Active Yield Fund can decide which investment strategy to follow. However, they cannot do so without adhering to a whitelist managed by the community of token holders. Moreover, all assets remain within the fund contract, ensuring no one else can take custody of the pooled capital. Similarly, investors can withdraw their capital whenever they wish.
Under the hood, every investor’s ownership share in the fund is tracked by a rebalancing token. Weekly rebalancing will occur during which all yield is sold for the investor’s base currency, be it ETH, WBTC, or USDC. Lending the combined pooled assets generates yield through various DeFi protocols, with APYs ranging between 30% and 40%, depending on which asset is provided. Those who prefer staking deposits or ETH/STACK LP tokens for STACK rewards can achieve significantly higher APYs. Front-running yield aggregators will provide a competitive edge to Stacker Venture that will prove difficult to match.
Investors may want to take notice of the upcoming referral program provided by Stacker Ventures. Up to 0.5% of the deposits they refer to the Active Yield Funds are rewarded to referring users, with no earnings cap. All rewards can be claimed quarterly, ensuring the referred users share the long-term vision with other community members.
Transcending Centralized DeFi
Some people may see this approach akin to BlockFi or Nexo. Instead, Stacker Ventures provides more transparency and welcomes all community input. Furthermore, the Active Yield Funds will offer significantly better returns than many – if not all – centralized crypto interest service providers on the market. More competition in this space helps evolve and grow the entire DeFi industry.
Closing Thoughts
Revamping VC investing from the ground up through a decentralized approach creates an exhilarating opportunity for all cryptocurrency enthusiasts. It is an approach that will benefit those seeking early-stage investments and the many projects that require funding to roll out their long-term vision. Such a mutually-beneficial relationship is not always possible when raising funds from traditional VCs, making Stacker Ventures’ approach unique. On the other hand, the Active Yield Funds revamp the DeFi industry, providing the little players with optimal yields but without the well-known stress that goes hand-in-hand with balancing gas costs with fund management.
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