# What is Komm DAO? Komm DAO is the K-ommunity and gateway through which global Web3 companies succeed in the Korean market. Komm DAO focuses on Korea being the very innovative hub for Web3 companies, with the mission of democratizing access to the private markets. Komm DAO believes that everyone, whether retail or institutional investor, should have equal opportunity to invest in promising Web3 companies and support future growth. Komm DAO is a K-ollective of the top 10% of researchers, marketers, operators, developers, designers, and investors. Leveraging kollectivism, DAO members discover startups with high potential and invest their capital and talents. Members collaborate with Web3 companies around the world and can be rewarded with tokens for their contributions.
# Mission, Vision & Guiding Principles ## Mission Our ultimate goal is to empower the Web3 ecosystem through Kommunity-driven investment and Kollective excellence. ## Vision Komm DAO positions itself to be the leading Kommunity and Kollective of gurus in the Web3 space, members offering unique talent and insights and Web3 companies excelling in Korea. Our members bring their passion and skills, exchange ideas, and execute investments, in turn, democratizing access to private markets. We plan to establish a DAO Kommittee, specialized in localization and penetration capabilities in the Korean market, to incubate and accelerate more global Web3 startups. While currently in the experimental stage, Komm DAO will progressively decentralize its operations and governance ownership. ## Guiding Principles At Komm DAO, we are guided by our core principles in everything we do. These principles shape our actions and decisions, and we strive to exemplify them in our interactions with members, ourselves, and the world. Our 4 guiding principles are: 1. Crypto native and Web3 focused 2. Curated for the Korean market 3. Decentralized 4. Mainstreaming of Private market # Web3 & Crypto ## **Introduction to Web3** Web3 is the next evolution of the internet, built on the foundation of blockchain technology. It represents a shift towards a more decentralized and user-owned internet, where users have greater control over their data and digital assets. At its core, Web3 is about empowering users to become owners of their online presence. This is in stark contrast to Web2, in which a handful of tech giants have access to and monetize user data. Web3 is made possible by blockchain technology, providing a secure and transparent way for users to interact and exchange value without relying on intermediaries. This has given rise to a wide range of new Web3 applications and platforms, such as decentralized finance (DeFi), NFT marketplaces, and decentralized social networks. One of the key features of Web3 is the use of Decentralized Autonomous Organizations (DAOs), self-governing entities that operate on a blockchain. DAOs are run by their members, who collectively make decisions and control the organization's assets. This allows for greater transparency and accountability, as well as a more equitable distribution of power and ownership. Web3 represents a major paradigm shift in the way we think about the internet and our relationship with it. By placing control back in the hands of users, Web3 has the potential to create a more open, transparent, and equitable digital world. ## **Global Web3 Market** Estimated value of the global Web3 market amounts to $1.5 trillion as of March 2023 and is to continue growing at a rapid pace in the coming years. The growth is largely driven by the increasing adoption of blockchain technology, rise of decentralized finance (DeFi), and emergence of new Web3 applications and platforms. One of the key factors driving the growth of the Web3 market is the widespread adoption of blockchain technology across various industries, from finance and healthcare to supply chain management and gaming. Recent projections suggest that the number of blockchain users worldwide will reach 1 billion by 2025, up from just 40 million users in 2020. Another key factor is the exploding popularity of DeFi platforms, using blockchain technology to create decentralized financial applications. The total value locked in DeFi protocols surpassed $200 billion in early 2023, and some predict that the DeFi market could eventually surpass the traditional finance industry. Emergence of new Web3 applications and platforms also drives the growth in market size. Global market size of blockchain-based games amounted to $4 billion in 2022 and is projected to reach over $9 billion by 2026. The Non-Fungible Token (NFT) market has also seen tremendous growth, with sales volume surging from $13.7 million in 2018 to over $10 billion in 2021. Decentralized social networks and marketplaces are also gaining popularity, with some platforms seeing monthly active users in the millions; as these applications mature and become mainstream, they are likely to further fuel the growth of the Web3 market. As a result, the Web3 market has become an increasingly attractive area for investment. Global VCs and funds put significant amounts of capital into Web3 projects, with total investment reaching over $28 billion in 2022 alone. In fact, these funds have seen an average annual return of 87% since 2020, compared to 131% before 2020, according to Crypto Fund Research Crypto Fund Index, which tracks the performance of leading cryptocurrency investment funds. The potential for growth and innovation in the Web3 market is widely acknowledged and is expected to continue to drive investment and development in the years to come. ## **Korea Web3 Market** Korea is one of the largest and most attractive Web3/Crypto markets in the world, with a thriving community of active users. South Korea has the highest blockchain adoption rate in the world, with over 40% of the population having used blockchain technology in some form. In addition, the country has the second-highest per capita cryptocurrency trading volume in the world, with an average daily trading volume of around $6.6 billion. This strong market activity is driven by a number of factors, including the country's advanced technology infrastructure, a high level of investment in blockchain and crypto-related startups, and a favorable regulatory environment. The Korean government has been proactive in supporting the development of the blockchain and crypto industry, with initiatives such as the Blockchain Law Society and the establishment of a regulatory sandbox for blockchain-based startups. Web3/Crypto market in Korea is vibrant and growing with a large and engaged user base, making it attractive for businesses and investors alike. # Challenges and Opportunities The rise of Web3 has opened up new opportunities for both businesses and individuals to participate in the development of decentralized applications and protocols. Yet, the Korean market faces unique challenges and opportunities in this emerging field. **For Businesses:** * Given cultural differences, language barriers, complex regulations, and lack of network, only a handful of companies, amongst many, succeed in penetrating the Korean market. * Due to Web3 being nascent, there is a shortage of early adopters, builders, and enthusiasts to participate in the very early stages of product/service development. * Crypto VCs tend to exit hastily, solely focusing on their maximum profitability.
**For Individuals:** * Korean retail investors are restricted from token sales platforms, such as Coinlist and Republic Crypto. Thus, retail investors have no way to partake in any gains resulting from the seed/private investments of Crypto VCs being profitable (with returns from the past 7 years shown on coinmarketcap). * When listed on Korean exchanges, token prices tend to be at their highest, which causes retail investors to buy at the maximum prices and end up becoming the dumping ground for overseas exchanges. # Venture DAO ## DAO Market DAO Treasury currently amounts to $13.4B (approx. KRW 17 trillion), per DeepDao, a research platform. Number of DAOs grew by 550x over the past 3 years, from 20 DAOs in early 2020 to 11,000 DAOs in early 2023.
## T**raditional VC vs Venture DAO** Venture DAO is more efficient than traditional VCs in many ways. Traditional venture capital takes at least 2\~5 months in their decision making process, and they tend to prefer later rounds of investments, as opposed to pre-seed and early-stage startups. They also put in a considerable amount of time and effort to find the appropriate, potential opportunities. For Venture DAOs, members themselves are investors as well as general partners. Any member can propose a potential investment opportunity. Other members vote to decide whether to proceed with the opportunity, and the entire process is automatically handled by Smart Contract. Ultimate investment decision is made on a timely basis through discussion amongst members, leaving out customary processes traditional venture capitals require such as buy-side valuation, internal rate of return calculation, due diligence, drafting and marking up contracts, and etc. Furthermore, Venture DAO has advantages in exits. Web3 companies tend to launch tokens for governance and distribute them to equity investors using the SAFE+Token Warranty. Venture DAO can sell the startups’ tokens on decentralized exchanges (DEX) or centralized exchanges (CEX) as well as sell its shares over the counter. Traditional VCs may face pressure from their LPs to recover investment funds over an extended period. Reduced time in LP recruitment, due diligence and execution, and exit leads to accelerated cycle of investments for Venture DAOs, creating exponential opportunities for investments. All deal information in the DAO is stored on-chain to increase transaction transparency. Anyone can verify how all investments were made and votes were conducted, making it the perfect use of blockchain technology. The DAO system will become the ideal Scorecard system, as it constantly seeks and validates new ways and has transparent collaboration processes. Since 2018, Web3/cryptocurrency VCs/funds have grown by over 40 times, with most of them preferring investment in market proven startups. Web3 founders in the pre-seed or seed stage face difficulties raising funds and often lack sufficient human capital. In particular, Web3 founders prefer access to Venture DAO's capital and talent pool. Venture DAO contributors are passionate about Web3 and support investment companies in their field of expertise such as research, marketing, development, design, and operations. Web3 companies can access deeper resources and networks through Venture DAOs, and this diversity in the ecosystem will lead to greater product and service innovation. ### **Comparison between VC and Venture DAO**
Venture DAOTraditional VC
Decision makingAs short as 2 weeks At least 2+ months
Investment roundsPre-seed ~ Series APrefers later rounds
Screening of potential investments Member-driven proposal and screening processFocus on predetermined investment sectors
Minimum investment amount Low (relatively small amounts ranging from a few thousand to tens of thousands of dollars)High (large-scale investments, typically requiring several million dollars or more)
Deal pipeline Massive, worldwide network
Unlimited partners		Limited network
1 partner for 10 companies
Exit QuickSlow
Growth support Effective allocation of talent Limited allocation of talent
# Solutions With Venture DAO as a solution, we propose the following measures to address the challenges and seize the opportunities in the Korean Web3 market for both businesses and individuals. **For Businesses:** * Attract investment in the pre-seed and seed rounds, particularly in the early stages of product/service development. * Expand into the Korean market, a key country in the Web3 industry. * Build a strong K-ommunity of supporters for long-term contributions and support, rather than those seeking short-term profits.
**For Individuals:** * Invest in promising Web3 companies. * Gain access to cutting-edge Web3 products/services as an early adopter. * Apply individual strengths in areas such as development, design, and marketing, and be compensated. * Interact with start-ups and their entrepreneurs. * Form a network with a wide array of experts in the Web3 industry. Through Venture DAO being the hub, we aim to support the early stages of Web3 companies with specialized capital, technology, and networks tailored to the Korean market. # Charter Komm DAO Charter consists of a set of accessible documents that outline the governance structure and operational guidelines for Komm DAO. These documents are designed to be easily understandable for a wide range of individuals, fostering democratic decision-making and community participation within the network. {% embed url="" %} # Page # DAO Governance Governance of Komm DAO is decentralized and leverages smart contracts on the Ethereum blockchain. The governance process has implemented success factors of notable DAO models such as Orange DAO and The LAO. All DAO members are welcomed to participate in all aspects of the governance, including making decisions on potential investment opportunities, policies/processes and any other matters requiring collective decisions. In other words, any and all members can partake in the deal sourcing and opportunity review, as well as contribute their expertise and capabilities to portfolio companies for growth and development. **Proposal Process** The proposal process is a crucial component of the Komm DAO governance model. Members initiate the process by submitting a proposal draft, and the proposal is then open for feedback and improvement from other members. This leads to a collaborative approach to decision-making. \ **Voting Power** DAO utilizes one-token, one-vote system. Prior to token launch, each Komm DAO NFT membership equals one vote. Upon governance token distribution, new voting system will be implemented. Voting power can be delegated to a trusted DAO member. **Voting Stages** There are two stages in voting: temperature check and consensus check. (1) Temperature Check: Any member can post on Discord to raise an issue or ask a general question. Members can discuss and share their thoughts over the topic. Members can also vote-for or vote-against using emojis. No winning threshold is required. Given the feedback, the initiator can tweak the post to proceed to the next voting stage. (2) Consensus Check: The initiator can publish the updated proposal on DAO platform and create a poll. The poll can be either a binary choice or multiple choice with a single answer. Once the poll is created, one day of voting delay (or, 24 hours) is required. The poll will then remain open for four days. Members can cast a vote with their voting rights within the voting period. To pass the proposal, a simple majority is needed. If the proposal did not receive a majority vote, the post will be closed immediately. If passed, there will be a two-day of timelock period for the proposal to be queued, reviewed, and executed by the Governor. Once approved and finalized, the smart contract will be validated. **DAO Governance Flow** 1. Proposal: A member generates and submits proposals for potential investments, community growth, and other matters that affect the DAO community. 2. Review and Feedback: DAO members review and provide feedback on the proposal. 3. Revision: The initiator modifies the proposal based on feedback received. 4. Consensus: Members reach consensus on whether the proposal moves on to the next step for on-chain voting. 5. Uploading to On-Chain: The proposal is uploaded onto blockchain for token-based voting. 6. Governance Decisions: DAO members vote on the proposal and make governance decisions. 7. Smart Contract Execution: Once approved, the smart contract is executed and the DAO moves forward with the approved proposal. # DAO Member Komm DAO values active involvement and open communication among members to foster the growth of the K-ommunity. All members are encouraged to explore and share web3 investment opportunities and provide their valuable insights and expertise. The DAO is open to professionals who can contribute to the DAO's growth and success in various ways, including, but not limited to: 1. Investors with specialized knowledge in Web3 and a risk-tolerance for private investments 2. Researchers with knowledge in the latest technological advancements and market trends 3. Marketers and branding experts who play a crucial role in promoting the DAO's mission and vision to a wider audience, as well as in creating and implementing effective branding strategies for portfolio companies associated with the DAO 4. Legal and accounting practitioners with with experiences in fund investments and operations 5. Developers with experience in web3 technologies and smart contract development 6. Designers with skills in user interface (UI) and user experience (UX) design to create user-friendly applications and interfaces for the decentralized web 7. Headhunters and talent scouts who can identify and recruit top talent to join the DAO's growing community and portfolio companies #### Member Participation Komm DAO members are encouraged to actively participate in the K-ommunity, by writing proposals, participating in discussions and voting, providing constructive feedback to improve the DAO system, and regularly evaluating and providing feedback on DAO milestones. Members are also encouraged to support the development, design, and marketing of portfolio companies invested by the DAO to maximize their value. Members are also expected to make friction, tension, and inefficiencies known to all DAO members so that changes, improvements, and learning can take place. They should participate in the official communications channels on a regular basis and act in the best interest of the DAO and its members. Komm DAO will start as a curated K-ommunity of selected web3 participants, and new members shall be invited by existing members. Existing members will kollectively discuss in the governance committee and vote whether to approve any new members. Member candidates receiving more than the majority vote will be invited to join. #### Membership Process The admission process for Komm DAO is as follows: 1. Invitation by an existing member 2. Discussion of the governance committee regarding the candidate 3. Off-chain vote by the governance committee whether to approve the new member 4. Onboarding of the new member \ DAO members can participate in an Incentive Program or Campaign to receive rewards, but they must belong to the contributor group called Cohort. # Kohort The Komm DAO allows members to form teams (called Kohorts) with a common goal, consisting of one leader and a few members. Kohorts can be created based on the same areas of expertise as listed for DAO members. Kohorts tend to work best with 3-10 members. Kohorts report to a Permanent Committee and must have their own multisig with at least 2 signers out of 3 signatories. Kohorts are impermanent and are responsible for setting their own rules and processes for decision-making and compensation of team members. Kohorts may include non-members and may be disbanded by the team or by DAO-wide vote. Examples of Kohort include: * Marketing Kohort for Project 1 * Leader * Member 1 * Member 2 * … * Member 10 * Developer Kohort for Project 2 * Leader * Member 1 * ... # Kommittee Kommittee serves as the central decision-making body of the DAO, responsible for setting priorities, defining the direction of the organization, and overseeing the day-to-day operations of the community. Komm DAO consists of three main Permanent Kommittees - Governance, Treasury, and Programs. Each committee is composed of a minimum of three (3) members, typically acting as Kohort leaders. #### Governance K-ommittee The Governance Committee is the backbone of the DAO's decision-making process. They work to ensure that the DAO operates with transparency and fairness, overseeing the proposals process, voting, and discussions. The committee also plays a key role in resolving conflicts of interest and ethical dilemmas, while conducting elections for Permanent Committee seats each Season. In addition to maintaining the DAO's legal structure, the Governance Committee is responsible for keeping the Charter up-to-date through the proposal process. #### Treasury K-ommittee The Treasury Committee is responsible for managing the DAO's financial assets and resources. They work to safeguard the DAO's assets and distribute tokens according to the will of the DAO membership through the proposal process. The committee is also responsible for managing the DAO's finances, and its members are required to be on the key DAO multisig wallet(s). Additionally, the Treasury Committee proposes budgets for the current and subsequent seasons and proposes the minting of new DAO tokens beyond the current limit. The committee collaborates with other committees to ensure the efficient use of resources and the overall financial health of the organization. #### Program K-ommittee The Programs Committee manages the DAO's programs and initiatives, overseeing the creation and maintenance of software, tools, and documents, and managing projects outside the responsibilities of other committees. They also grow the DAO's membership and capabilities through programs and partnerships, manage membership information and safeguarding data. The committee plays a critical role in fostering collaboration and engagement within the DAO community to achieve common goals related to program development and implementation. To optimize the efficiency of the decision-making process, it is essential to limit the scope of decision-making, thus reducing the time and resources required for processes. By focusing on the primary areas of interest and minimizing disagreements, members can concentrate on the DAO's core objectives. The Komm DAO community adopts a somewhat centralized approach centered around the Governance Committee, gradually moving towards decentralization by creating new community pools and workstreams. The community continuously experiments with ideas proposed by its members, evaluates and onboards recommended individuals from existing members, and expands into sequentially decentralized communities. With a diverse talent pool including web3 researchers, developers, designers, operators, investors, and more, the Komm DAO community will possess unique capabilities to identify potential web3 companies that could become unicorns. # Membership NFT and Token Komm DAO's membership NFTs and governance tokens are crafted to facilitate effective community governance and incentivize positive contributions from members. The membership system has been carefully designed to provide unique digital identities to the members through Soulbound NFTs, recorded on the blockchain. The NFTs not only represent voting powers within the DAO, but also serve as a proof of reputation and qualification of the members. DAO K-ontributors can receive Soulbound NFTs by actively participating and contributing to the DAO's objectives in different ways, such as deal sourcing, due diligence, marketing, and investment execution. These NFTs incentivize positive behaviors within the community and can be leveraged to build a social and professional "influence," internally and externally. K-ontributors can leverage their Soulbound NFTs to showcase their expertise and become recognized as experts in their fields, by establishing on-chain credentials and building their brands within the wider Web3 community. Members who hold Soulbound NFTs may also be eligible for future token airdrops when Komm DAO issues governance tokens. This provides an additional incentive for contributors to participate and contribute actively, as they can earn tangible rewards for their efforts. Komm DAO's governance token is a powerful instrument that can benefit the K-ommunity through a robust governance structure, encompassing the following functionalities: 1. Governance: Token holders can participate in the decision-making process of the DAO through voting on proposals. The proposals range from protocol upgrades, changes to fee structures, electing new governance committee members, to any others affecting the DAO. This ensures that the community has a say in the direction of the DAO, promoting a sense of ownership and transparency. 2. Incentives: The token can be used to incentivize members to contribute to the development and growth of the ecosystem. Token holders can be rewarded for participating in various activities such as development, marketing, and community events. The tokens can also be utilized to pay for transaction fees. 3. Access: Token holders can access certain features and/or services within the DAO, such as exclusive contents, early access to new products, or even top-tier investment opportunities. This enhances the value proposition of the token, making it a desirable asset to hold. 4. Reputation: The token can also serve as a reputation system for members of the DAO. Holding a particular amount of tokens can signify a high level of commitment and contribution to the community, which can be acknowledged and rewarded, further strengthening the community. 5. Staking: The DAO can incentivize token holders to stake their tokens for a certain period, providing them with rewards or a percentage of the fees generated by the DAO. This promotes long-term holding and strengthens the community. Overall, the Komm DAO's approach to membership NFTs and governance tokens are designed to create a more engaged and incentivized K-ommunity, as well as to establish the DAO's reputation as a hub for Web3 innovation and investment. # DAO Framework First-generation venture DAOs, such as The LAO and Meta Cartel Ventures, operate as Investment Clubs or Syndicates under the U.S. securities law. The maximum membership limit of 99 and strict accreditation requirements for U.S. investors make it challenging to expand their communities. To build a scalable and powerful K-ommunity, Komm DAO utilizes the Origami Framework, a second-generation DAO+ Venture Fund model. The Origami Framework separates the DAO and the Venture Fund by establishing a partner fund outside of the DAO. The Fund handles fundraising, contracts, and investment decisions, while the DAO focuses on deal sharing, due diligence, and growth support. Similar to traditional VC funds, the Fund charges management fees and carry fees, which are used to reward General Partners and DAO members based on their efforts and contributions. GPs make the final investment decisions for quick investment decisions, while DAO members vote on the use of DAO treasury funds. This model has several advantages: * Swift decision-making process * Ability to raise external funds through GPs * Compensation for DAO members based on their contributions * No limit on the number of DAO member * No need to be an accredited investor to participate # Economic Model Komm DAO employs a hybrid organizational structure of DAO and Venture Fund, focusing on investing throgh SAFE+Token Warranty or SAFT agreements. This hybrid model aims to optimize resource allocation and maximize the returns for all stakeholders involved. Within this model, the Venture Fund calculates carried interest on token distributions, irrespective of the actual profits generated. When a token distribution event occurs, a carry of 15% is taken out from the total token amount, and the remaining tokens are distributed to the investors. For example, if an investor is entitled to 1,000 tokens, a 15% carry is applied, resulting in a distribution of 850 tokens to the investor and 150 tokens being set aside as carried interest. All of the carried interest, in this case, 150 tokens, goes directly to the DAO Treasury. This approach ensures that all profit and upside generated by the Venture Fund is channelled back into the DAO, strengthening its capacity to fund its initiatives and objectives. This carried interest is intended as a reward for DAO members who have made contributions to the DAO, and is typically distributed as Komm DAO tokens. Carried interest calculations are performed on a deal-by-deal basis. In cases where profits surpass five times the contributed capital, the carried interest rate increases to 25%. It is worth noting that the carried interest rate may vary depending on the investment and can be subject to community voting. In addition to carried interest, the fund levies a 2% management fee on the total value of assets under management. This fee serves to cover the expenses incurred by the Fund in connection with its operations, including but not limited to research, as well as legal, accounting, and administrative costs. Komm DAO's economic model is designed to incentivize members to actively participate in the investment process and provide ongoing support to portfolio projects. The DAO nurtures collaboration and information sharing during the due diligence process and provide continuous updates on the progress of portfolio projects. Komm DAO's community-driven approach and transparent economic model aim to foster a sense of ownership among members and drive sustainable growth for the DAO's portfolio companies. Members can contribute to the DAO in various ways, including: 1. Deal sourcing and Communication - communicate with founders at potential investment companies and share deal information with the DAO. Secure investment allocation for the opportunity and provide regular updates on developments. 2. Due diligence (DD) - perform a thorough analysis of the project, including market, product, competition, team, tokenomics, and other aspects. 3. Operations and Management - review investment contracts and manage member investment allocations for each investment deal. Continuously monitor legal and accounting issues and share news with the DAO community. 4. Growth Support - leverage the expertise of professionals in research, marketing, development, design, and operations to contribute to the growth of the project. Komm DAO itself does not generate any revenue and is not involved in the fund's revenue model. Instead, the DAO is responsible for governance and decision-making, such as selecting the professional investors who manage the fund and managing the DAO treasury. Our passionate, professional members will support the growth of portfolio companies and build a differentiated community in sourcing promising Web3 projects. By sourcing high-quality deals, we will generate greater returns for the DAO Treasury and attract top talent to further strengthen the Komm DAO community. # DAO Treasury The DAO Treasury is a funding pool for the sustainable growth and development of the Komm DAO. It serves multiple purposes, such as rewarding contributors, employing DAO team members, and supporting sub-DAO initiatives. DAO members engage in governance mechanisms and participate in making funding decisions to ensure that the allocation of resources aligns with the community's goals and values. The Treasury is managed to prevent any loss of funds, and it is the responsibility of all members, not just a single member, to engage and participate in the governance mechanisms to allocate the funds in line with the DAO’s mission. The DAO Treasury has several policies and procedures in place to ensure responsible management of funds. For example, the DAO may implement guidelines for rewarding contributors, allocating funds to support sub-DAO initiatives, or employing DAO team members. By consolidating the Treasury's functions, Komm DAO aims to streamline the governance process and encourage active participation from its members in managing the collective funds effectively. # Roadmap Komm DAO aspires to become a reputable, decentralized organization with a focus on innovation and K-ommunity-driven initiatives, through achieving the goals noted below. **Short-term** * Selecting DAO operating tool and growing community members * Electing Governance K-ommittee of 9 members (max) * Drafting litepaper and DAO Charter * Setting up DAO operating company and venture fund **Mid to long-term** * Launching new initiatives such as incubators, accelerators and grants * Exploring new governance and incentive mechanism * Onboarding various community members