Neptune DAO: Decentralized Liquidity for Scaled Yield
tl;dr
Neptune is a tokenless liquidity DAO supported by OpenLaw and, The LAO and Flamingo DAO. It is governed by the majority rule of its max. 99 members to invest in cutting-edge crypto initiatives. It restricts power gaps between its members and keeps most of its affairs private and accessible to members only.
About
The Neptune DAO is the first DAO to focus on Liquidity management. It aims to provide liquidity and support to DeFi/NFT and other protocols. Built on Moloch, it got deployed on-chain on 2 April, 2021, and its current 71 membership seats sold out off the bat. The initial buy-in was 60 Eth, and the sale got Neptune’s initial treasury to a total of 10,200 Ether (data: Neptune on DeepDAO & correspondence with Neptune).
Of that treasury, 6,539.81 Ether had already been allocated at the time of writing. According to Neptune’s proposals data and its documents, the funds (minus fees and expenses) were allocated to five Side Pockets — approved accounts designated by the members towards specific investment strategies. As of July 29th 2021, Neptune registered 12 such strategies, the details of which are not publicly disclosed.
Neptune was incubated by The LAO and another LAO offspring, Flamingo DAO, members of which reportedly make up an important part of its membership. It is an implementation of OpenLaw’s and The LAO’s vision to decentralize legacy functions on-chain through Limited Liability Company DAOs. Neptune thus leverages the wisdom and financial resources of its DAOist members to identify cutting-edge crypto projects and approach them with decentralized liquidity and expert advice.
How do I join?
A Neptune Member may be an individual or another legal entity. Following legal and other considerations, Neptune allows a maximum of 99 Members. As of August 2021, it is contemplating new members. As Neptune is set “to create additional liquidity-focused DAOs, independently operated but adjacent to Neptune”, these future DAOs may become similar venues for participation.
Prospective members should be aware that every member of Neptune must first be acknowledged by the DAO as a legitimate accredited investor as by U.S. law. This carries a set of documentation demands essentially aiming to convince that one is (1) financially solid enough to risk $US 100K’s; (2) a risk-aware risk-taker; and (3) knowledgeable and experienced enough in the relevant trades.
Public updates by Neptune appear mainly on its Twitter account, and sometimes on the LAO-Flamingo-Neptune Telegram channel.
Ser, what about the Token?
Neptune DAO does not have a minted token. Rather, it uses Neptune units to represent DAO ownership and governance. Neptune units are not meant to be transferred, but may be so upon their owner’s request and majority approval.
Ownership is endowed by packages of 100,000 Neptune units, which stand for 1% of the DAO each. Each Member may buy-in between 1%-9% of the DAO for 60 Ether per package. The total 10,200 Ether raised therefore represent 170 such unit packages, unevenly distributed among members.
Governance
Strong majority rule: Neptune’s documents repeatedly assert its members’ ownership, control, and complete agency over any decisions. Indeed, a majority of Neptune Members may set or change, permanently or ad-hoc, any parameter, strategy or rule of the DAO, or even wind down Neptune altogether. Members may also delegate their voting rights to other Members, or rage-quit the DAO at any time.
Limited power gaps: As any member may purchase 1–9 voting parcels, the strongest Neptune voter may outweigh the weakest by 9:1. Actual parcels distribution shows less than 10% of the members holding 6%-9% each, while over 80% are in possession of 1–3 unit packages. While 9:1 is not a negligible margin, it is significantly more balanced compared to the often unlimited power of capital in DAO governance. The power of less affluent members is thus enhanced. The 9:1 limit is not strict, though, thus members may sell their interest to another member per governance vote.
Special majorities: Most types of Neptune decisions require a simple majority to pass — more Yes than No’s pledged Neptune units. Exceptions to this rule include:
1. changing the operating agreement: needs an absolute, 50%+1 majority of Neptune units;
2. forcing out a Neptune Member: with an absolute, 50%+1 majority of Individual Members (stressing the community aspect);
3. Deciding to move all of the DAOs assets “to another entity or party”, which would need “supermajority” as defined in Neptune’s operation agreement.
Authority to relinquish authority: Neptune’s declared position is that “There will be no manager or general partner of Neptune” — that is, no organ to govern over members’ authority. This suggests a unique exception to the ultimate power of members. However, Neptune’s official documents do recognize the option of a majority decision to onboard a general partner, and generally to “grant additional authority to third parties” — though, it reads, this “wouldn’t be in the spirit of things”.
Significant third parties: Neptune uses the services of a service provider (currently: OpenLaw) and a facilitator (currently: Aligned Capital, headed by Sam Cassatt) to enact members’ decisions on-chain, to keep maintenance, and to advise on / facilitate investment strategies. Those parties have no standing in voting.
Transparency: The Neptune DAO website suggests rich information on structure, functions, framework and regulations. Conversely, operative governance information is not publicly accessible yet. Neptune’s regular proposing, voting, strategy and investments are mostly conducted off-chain, through its private dApp. Membership and Side Pockets allocation decisions are traceable exceptions, as they are committed directly on-chain.
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