Passive DAOs

DAOs mentioned here will solely focus on passive strategies, exclusively tracking tokens that meet specific criteria. And will be managed by VaderAI. These DAOs aim to provide unbiased exposure to tokens within the Virtuals Ecosystem, spanning various themes and categories. With high liquidity, these DAOs will be easily tradable, ensuring minimal friction. Each DAO will have clearly defined parameters, determined by us, and transparently outlined for its participants.

• Theme: Large Cap, Mid Cap, Small Cap, Micro Cap, Productivity, DeFi, DeSci, Gaming, Influencers, etc. The manager has the freedom to define the focus and rules of the DAO based on their expertise.

• Index Composition: Clear rules on which tokens are included in the DAO. This might include an algorithmic or rule-based selection process to ensure consistency and transparency.

• Rebalancing Frequency: The frequency at which the index will be rebalanced, either periodically (e.g., weekly, quarterly) or based on certain thresholds (e.g., when an asset's weight reaches a certain limit). This is important to maintain the passive nature of the strategy while also adapting to market changes.

• Tracking Error: A measure of how well the passive index replicates the performance of the underlying assets. A lower tracking error indicates that the index is effectively mirroring the benchmark's performance.

• Performance Benchmark: A reference index or benchmark against which the passive index’s performance is measured. This could be either $VIRTUAL, an AI Agents index or an altcoin index.

• Index Weighting Methodology: Details on how the assets within the index are weighted. Common methods include equal weighting, market-cap weighting, or a custom weighted approach based on factors like liquidity, volatility, social engagement and more.

• Minimum Liquidity Requirements: Since passive DAOs typically track a broad set of assets, it's important to define minimum liquidity standards for the underlying assets to ensure ease of trading and rebalancing. The buffer would be kept in the form of $VADER and will be a minimum of 10% across all passive DAOs.

• Maximum Exposure to Single Asset: A limit on how much a single asset can comprise of the index’s total value to ensure diversification. The figure would be different for each passive DAO and be specified on the DAO's description.

• Staking Reward Strategy: This parameter describes how staking rewards from the underlying assets will be treated; answering questions such as wheter they be reinvested automatically into the DAO or paid out to contributors.

• Minimum Holding Period: While passive strategies generally avoid frequent trading, it can be helpful to set a minimum holding period to discourage short-term speculation and ensure the strategy’s long-term focus.

• Daily Withdrawal Limit: The maximum total amount that can be withdrawn from the DAO on any given day. This limit helps manage the liquidity and stability of the DAO, preventing sudden large outflows that could negatively affect the asset pool. The figure would be different for each passive DAO and be specified on the DAO's description.

• Daily Withdrawal Limit per Wallet: The maximum amount an individual wallet can withdraw in a single day. This parameter ensures that no single contributor can destabilize the DAO by withdrawing an excessive portion of assets. The figure would be different for each passive DAO and be specified on the DAO's description.

• Initial Lock Up Period: A period during which contributors are not allowed to withdraw their contributions. This prevents sudden redemptions that could disrupt the DAO's strategy, particularly in volatile or illiquid markets. This wouldn't apply to most passive DAOs but could potentially apply to micro cap and illiquid DAOs.

• Management Fee: There will be a 0.5% fee on passive DAOs managed by VaderAI. These fees will go to $VADER stakers.