Introducing PieDAO, the asset allocation DAO.

Alessio Delmonti
Mar 3, 2020 · 5 min read

The Pie DAO is a decentralized organization dedicated to bringing market accessibility and economic empowerment by providing a governance layer to tokenized portfolio allocations available to anyone on the Ethereum network.

Introduction

In the last decade, a significant shift in people’s relationship with money has occurred, due to a combination of macro-trends in economic, political and technological forces.

Indeed, people have become increasingly mindful of domestic systemic risk and been seeking passive investment tools designed to mitigate that risk.

Take ETFs, they have been one of the biggest revolution in finance in the last 50 years. They are an easy way to gain diversified exposure to different asset classes.

These products, however, didn’t change much since the beginning, as a matter of fact, they didn’t change at all. They are still inaccessible to the vast majority of the people, because of either:

  • Capital requirement
  • Geographic restriction
  • High expenses

Those funds also offer no exposure to new asset classes like crypto and DeFi.

Crypto & Decentralized finance is however complex and risky in isolation (see: In search of steady returns).

Actively managed funds have historically underperformed a passive index approach (like the S&P500) in the long term, crypto is no different.

The shift from active funds to passive.

The market is in a strong demand for a single token that gives consistent returns with managed risk.

A good example is represented by lending protocols like Compound, where interest rates are however highly coupled to specific market conditions, ofter temporary.

New and better options are essential, for our money to work for us.
Passively managed funds are eating the world of finance and we have none in crypto and no decentralized option for traditional assets. Until now.

At PieDAO, we believe that the future of investing is passive and permission-less, therefore we are working to solve these problems by democratizing access to top-quality passive investment strategies and governance of the underlying indexes.

How does PieDAO improve the status quo.

Traditionally, a very small number of people are able to create new investment products. These limits allocation strategies available, who they are available to, and who can benefit from the fees they generate.

With PieDAO, anyone can participate in the creation of a tokenized portfolio allocation which might include exposure to digital & traditional assets (via synthetic asset), we call these allocations PIEs.

Each “PIE” is available globally 24/7 on the Ethereum network, with no minimums and low fees shared by the community.

Each of the PIE is always redeemable for the underlying assets.

PIEs are designed for composability, meaning that once core allocations are in place, they can be bundled together to create even more stable and resilient allocations.

Designed with composability

Stable PIE → Stable collateral → Low collateralization ratio = Scaling DeFi ️😍

How does PieDAO governance work?

$DOUGH is the PieDAO governance token. Owning DOUGH makes you a member of Pie DAO. Holders are capable of participating in the DAO’s governance votes and proposing votes of their own.

Token holders get to collaborate and vote on the weight, risk assessment of the assets in the PIEs and what are the right and fair fees.

Governance follows a funnel of discussion, starting from Discord, passing by the forum and ending in financial specifications on Github that we call Pie Improvement Proposals.

Once consensus has been reached on the off-chain channels, the specs of the PIE gets notarized via a DAO vote.

Pie Improvement Proposal Flow

If the members of PieDAO did a good job, the PIE gets traction and accrues fees that are charged in the underlying assets of the portfolio allocation and collected into a fee pot, fees are then redeemable by participants in governance.

Governors of the DAO have economic incentives to do a good job.

In the future, more complex governance mechanism will be developed for PieDAO which will include:

  • Staking of tokens and rewards
  • Delegation to elected governors
  • Two different classes of voting
  • Crypto economic system design against free-riding

Conclusions

PieDAO is the result of months of conversations between some of the most active members of the DeFi community. It’s an open community committed to empowering financial freedom by bringing professional diversification to the DeFi space. Anybody in the public community may support these efforts by completing bounties, making feature requests, or proposing new Pies.
Come say hi over Discord or Twitter and join the conversation!

The Pie DAO is a decentralized organization dedicated to bringing market accessibility and economic empowerment to anyone with an internet connection through Pie Protocol. Anybody in the public community may support these efforts by completing bounties, making feature requests, or proposing new Pies. DOUGH token holders are the DAO’s decision-makers, governing which proposals are accepted. If you want to know more about Pie DAO:

Website

Discord

Pie Dao Forum

Official Documentation

Github

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